Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

CITY OF BRISTOL (PORTISHEAD DOCKS) BILL [Lords]

Order for Third Reading read.

To be read the Third time tomorrow.

DURHAM MARKETS COMPANY BILL [Lords]

Order for Third Reading read.

Read the Third time, and passed.

Oral Answers to Questions — DEFENCE

Support Services

Mr. Devlin: To ask the Secretary of State for Defence what support services of the Royal Navy and Army are due for relocation; and what locations are being considered.

The Minister of State for the Armed Forces (Mr. Archie Hamilton): The support services of the Royal Navy and the Army are being rationalised to reflect the restructuring of the front line. That will involve the concentration of that activity to fewer locations.

Mr. Devlin: Why, when considering new locations for the rationalisations, is there an extraordinary tendency for them to be in the south and west of the country, whereas Scotland and the north-east of England, which have traditionally provided the best recruiting areas and the highest levels of staff retention, and which are also the areas with higher than average unemployment, are the very areas that always seem to face the brunt of the cuts first?

Mr. Hamilton: When we rationalise activities we have to take into account where those activities are already taking place. If we did not do that and relocated concentrations of work forces in different places, we would have to make all the employees involved redundant. If we locate them where there is an existing facility, people working there provide a useful core for the new headquarters and it is then not necessary to make them all redundant.

Ms. Rachel Squire: Will the Minister confirm that for the past seven years Rosyth royal dockyard has been given repeated and specific assurances that it would obtain the future submarine refitting work? Will he give his promise that that will in fact happen?

Mr. Hamilton: No; but I can promise that the position on the dockyards and the naval bases is being reviewed, and we hope to have a decision by the end of the year.

"Options for Change"

Mr. Patrick Thompson: To ask the Secretary of State for Defence if he will make a statement on the state of implementation of "Options for Change".

The Secretary of State for Defence (Mr. Malcolm Rifkind): Our proposals to move to smaller, but more flexible, more mobile and better equipped armed forces continue to be implemented. Progress was reported in this year's Statement on the Defence Estimates and further announcements have been made since then. I shall continue to keep the House fully informed of progress.

Mr. Thompson: While paying tribute to the professionalism of the Royal Anglian regiment, will my right hon. and learned Friend comment on the problem of tour intervals for Northern Ireland? Will he also take the opportunity to emphasise the importance in future policy of the armed forces reserves, who need our strongest support?

Mr. Rifkind: Yes, I am happy to pay tribute to the Royal Anglian regiment, which has performed valiantly in Northern Ireland. As I am sure my hon. Friend is aware, an exceptional problem has arisen: although 2 Battalion, which is due to deploy in Northern Ireland in December, will not have been in Northern Ireland for some two and a half years, there are, I think, 153 members of the former 3 Battalion who, because of the amalgamation in August this year, will return to Northern Ireland far sooner than would normally be expected. That exceptional problem has arisen because of the amalgamation, and I pay tribute to the professionalism of those who have been asked to serve in that way.

Mr. Trimble:: As the Secretary of State knows, there has been considerable concern about whether, with the reduction in the number of infantry units under "Options for Change", the Army will be able to meet its committments. Notwithstanding the point made in reply to the hon. Member for Norwich, North (Mr. Thompson), is it not the case that the average gap between tours in Northern Ireland is down from the promised 24 months to nearer 15 months? Does that not show that the proposed rundown in infantry units is unrealistic?

Mr. Rifkind: No, it does not. It was explained at the time of "Options for Change" that, because of the number of amalgamations taking place, it would not be possible to meet the 24 months target until the end of the rundown period—but it is still our intention to achieve that target. I assure the hon. Gentleman that I keep the question of force levels very much under review, as it is important to ensure, for the reasons to which the hon. Gentleman rightly drew attention, that the Army is not overstretched.

Mr. Nicholas Winterton: Is my right hon. and learned Friend aware that the regiment with which I had the honour to serve, the 14/20 King's Hussars, ceases to exist on Friday this week, when it is to merge with the Royal Hussars to become the King's Royal Hussars? I hope that the whole House welcomes and supports that new premier cavalry regiment. Will my right hon. and learned Friend


give an assurance that the new regiment will have a regimental band? That is vital for the regiment. In particular, the new regiment feels that it will have no medical cover if it goes into combat without such a band because, as many right hon. and hon. Members know, bandsmen double up as medics.

Mr. Rifkind: I am sure that the new regiment being formed this week will inherit all the finest traditions of its two illustrious predecessors. As to regimental bands, the Army Board has been considering proposals, but no decision has yet been reached. I am fully conscious of the importance of regimental bands to the morale and tradition of individual regiments, and we shall ensure that all factors are taken into account before any decision is reached.

Dr. David Clark: Does not the Secretary of State realise that it is impossible fully to implement "Options for Change" without an amphibious aircraft carrier? Will he give the House a categorical assurance this afternoon that he will place an order for such a vessel? If he feels able to do so, will he also bring forward that order by six months, to cope with the labour demands of the two competing yards?

Mr. Rifkind: That particular order is currently out to tender. Obviously, those matters must be considered very carefully. It would not be proper to reach a hasty conclusion without due consideration, using the normal procedures applied to such projects.

Western European Union

Mr. Jessel: To ask the Secretary of State for Defence if he will give the reasons for the proposal under the Maastricht treaty that the Western European Union should discuss or consult upon defence and security matters with the European union.

Mr. Rifkind: In line with the views expressed at the NATO summit in Rome in November 1991, it was agreed at Maastricht that the Western European Union would be developed as the defence component of the European union, and as a means to strengthen the European pillar of NATO. The WEU's relationship with the European union will be limited to the elaboration and implementation of the decisions and actions of the union that have defence implications.

Mr. Jessel: As defence—to keep our people safe and free—is the first duty of any Government and is not merely some facet of foreign policy, will my right hon. and learned Friend explain how it will strengthen our defences and security to make the Western European Union discuss defence matters with the European union, most of whose members showed themselves to be vacillating, craven and supine when Saddam Hussein attacked Kuwait?

Mr. Rifkind: I assure my hon. Friend that responsibility for defence policy will remain firmly with the north Atlantic alliance and the Western European Union. My right hon. Friend the Prime Minister was very successful in ensuring that the European union would not have defence responsibilities of the kind suggested by others. In the Maastricht treaty, the Western European Union has some

responsibilities for security matters; because some of them might have defence implications, it will occasionally be appropriate for discussions to take place with the WEU.

Mr. Jim Marshall: Will the Secretary of State emphasise the need for absolute transparency between the WEU and NATO? What will be the relationship between the WEU and the Community if the Twelve fail to ratify the Maastricht treaty?

Mr. Rifkind: The decision to develop the WEU as the European pillar of the north Atlantic alliance was not simply a matter referred to at Maastricht but was commended at the NATO summit some months preceding Maastricht. NATO itself believes that, on purely European matters, it is useful that the WEU, which has existed for more than 40 years, should be the means of ensuring European co-operation in a form that strengthens rather than weakens the north Atlantic alliance.

Mr. Viggers: Although it is appropriate to investigate ways in which we can shape our defence effort through the European Community and the WEU, does my right hon. and learned Friend agree that the defence threat that NATO was created to resist has not completely gone away and that we must not in any way weaken our contribution to NATO, which has served us so well over the past 40 years?

Mr. Rifkind: My hon. Friend is entirely correct. It is a sad but inescapable fact that although the cold war has ended, it has been followed, for the first time since 1945, by several hot wars in various parts of Europe. It is significant that the new democracies in eastern Europe—in Poland, Czechoslovakia and Hungary—proclaim as loudly as anyone the importance of NATO as a beacon of stability and security in a shaken Europe.

Helicopter Coverage Group

Mr. Ainger: To ask the Secretary of State for Defence what discussions his Department has had with the Helicopter Coverage Group since October 1986.

Mr. Archie Hamilton: The group has met twice since October 1986, in February and June 1987. My Department was represented on both occasions.

Mr. Ainger: Will the Minister accept that in the 1986 report on helicopter coverage minimum criteria were set for response times as well as for the number of search and rescue helicopters and the number of search and rescue bases? Does he accept that his announcement on 21 October, to close Brawdy, Coltishall, Leuchars and Manston, means that there is a reduction in the number of search and rescue helicopters available, a reduction in the number of search and rescue bases and an increase in response times? Will he ask the Helicopter Coverage Group to re-examine its announcement of 21 October and make a recommendation?

Mr. Hamilton: No; that will not be necessary because, although it is clear that the announced changes mean that there will be a reduction in the number of helicopters, there will be no reduction in the civil criteria which we were asked to meet by the Helicopter Coverage Group. We are abiding by those criteria, which mean that helicopters will be able to get to any incident within 40 nautical miles of


the coast within an hour during daylight hours. Those are the criteria that were laid down, and we are maintaining them.
Perhaps the hon. Gentleman's argument is about the criteria. If we were to have double the number of helicopter bases, I have no doubt that we could shorten the time to half an hour. But the criteria laid down is 40 nautical miles, and we are abiding by that.

Mr. Ian Bruce: My right hon. Friend will know that the current proposals being examined by the Ministry of Defence to move flag officer sea training will have implications for the placing of two Sea King helicopters on constant alert during daylight hours at Portland. When those helicopters are based at Plymouth rather than Portland, what will happen to the 100 or so people a year who are rescued by the facility?

Mr. Hamilton: As I have already said, we are fulfilling the civil criteria on coverage around the whole coast. We are continuing to meet the criteria with the changes that we have made. Therefore, as with any of the rescues that were carried out from Portland, I do not believe that there will be any risk that rescues from Plymouth will not be covered by the existing civil criteria.

Mr. Nicholas Brown: If the helicopters referred to in the question are to play their full part in NATO's rapid response force, they will need a landing platform helicopter vessel from which to fly. Why are the Government so tardy about making an announcement on the procurement of that landing platform helicopter? The Public Accounts Committee has already condemned the Minister's Department for not bringing its procurement programme into line with the needs of its major suppliers. When will the Minister address that issue and make an announcement about the procurement of the LPH?

Mr. Hamilton: As I am sure the hon. Gentleman knows, the LPH has nothing to do with search and rescue helicopters, which are covered by the Helicopter Coverage Group. If the hon. Gentleman is asking about the order for the LPH, my right hon. and learned Friend the Secretary of State has already explained that we have called for tenders. We expect to be able to make a decision shortly.

Mr. Bill Walker: My right hon. Friend will be aware of the popularity of the search and rescue unit at Leuchars in Fife, especially among the four regional councils that are affected by the rescues. The majority of the rescues that are carried out are civilian rescues and it seems odd that those councils were unwilling to meet my right hon. and learned Friend to discuss ways for them to find finance to retain that popular search and rescue unit.

Mr. Hamilton: As we made clear in the document, RAF Lossiemouth gives adequate cover under the civil requirements for search and rescue which cover the Leuchars area. If any local authority regards it as a good way of spending charge payers' money to pay for the civil requirements, it is more than entitled to do so.

Autumn Statement

Mr. Bennett: To ask the Secretary of State for Defence if he will make a further statement in the light of the defence expenditure plans announced in the autumn statement.

Mr. Rifkind: The expenditure plans in the autumn statement allow us to maintain the direction for defence, set out last year, in "Britain's Defence for the 90s". The new force structure and lower pay and inflation will provide significant savings over the period.

Mr. Bennett: Does the Secretary of State agree that one of the most important aims of the autumn statement is For the Government to obtain value for money? Is he aware that the National Audit Office produced a critical report on the handling of defence lands by the Ministry of Defence? The public feel that if there are to be fewer soldiers, less defence land will be needed for training. Against that background, why have the Government suddenly decided to take over the Cnewr estate on the Brecon Beacons, ending the possibility of public access to the area, agreement on which has taken almost 10 years to negotiate? Should not the Ministry of Defence stop taking over new land until there has been a full review of the use of the countryside by defence forces?

Mr. Rifkind: I must remind the hon. Gentleman that, although the size of the armed forces is being reduced, large numbers of Army personnel are returning to the United Kingdom from Germany, where they will no longer be required. They will not be able to undergo training in Germany, so there is a continuing need for adequate training sites in the United Kingdom. The proper procedures are followed before a conclusion is reached on the suitability of any individual site for training.

Mr. Ward: Will my right hon. and learned Friend confirm that the £500 million programme for re-equipping amphibious forces announced by the Minister of State in the previous Parliament will still go ahead?

Mr. Rifkind: Obviously, we attach importance to ensuring that the commitments of the Ministry of Defence are properly resourced and resolved. We are examining the precise details of the implications of the autumn statement for several matters. I am conscious of the importance of amphibious work and it will be fully taken into account.

Mr. Hutton: I wish to point out that the tender deadline for landing platform helicopter vessels passed six or seven weeks ago and that it is fundamental to the survival of many of our warship yards that the Government make a firm announcement of their intention to place an order for the LPH. Will the Secretary of State make it clear to the House and to our shipbuilding community that the Government remain committed to placing an order for the LPH and, in addition, they intend to place a firm order for the landing platforms dock? That is also extremely important for the future of our industry.

Mr. Rifkind: The hon. Gentleman must appreciate that for six weeks to elapse after a tender deadline is by no means unusual. Several tenders for that order have been received. It always takes a proper period to evaluate all the tenders so that a proper conclusion is reached. I assure the hon. Gentleman that there has been no delay with the project.

Mr. Streeter: Will my right hon. and learned Friend confirm that one way in which the Minister of Defence can make substantial savings is to award the vital contract for the maintenance of the Trident boats to Devonport dockyard? That would save £400 million of taxpayers' money over 10 years.

Mr. Rifkind: Significant representations have been made by both Plymouth Devonport and Rosyth about that contract. All the matters are being properly evaluated at present. When we have reached a conclusion, we shall not only announce it but explain the reasons for it to the House.

Mr. Martlew: Does the Secretary of State not understand that the announcement in the autumn statement that increases in forces pay would be restricted to 1·5 per cent. has dealt a devastating blow to the morale of our forces, which is already at a low ebb? Does he agree that it is not good enough to tell our troops, whether on the streets of Belfast or in the Bosnian mountains with the United Nations, that the nation is grateful, but, by the way, we are cutting their wages by 2·5 per cent. next year? Will the Secretary of State review that disgraceful policy?

Mr. Rifkind: Members of the armed forces, as well as others in the public sector who are employed, understand the importance of ensuring that resources can be released to help provide employment in other areas. The hon. Gentleman—who, no doubt, is anxious for the problems of unemployment to be dealt with—should be more sensitive to the realistic ways in which that can be achieved.

Defence Industries

Mr. Thurnham: To ask the Secretary of State for Defence what representations he has received about the future prospects for the British defence industries; and if he will make a statement.

The Minister of State for Defence Procurement (Mr. Jonathan Aitken): We receive a variety of representations about the prospects for British defence industries from many sources. Despite the downturn in defence spending, our industry is both efficient and internationally competitive, and is well placed to meet the challenges of the future.

Mr. Thurnham: Does my hon. Friend agree that the European fighter aircraft project is an example of this country's ability to lead Europe, in regard to both the strength of our defence policies and the capability of our manufacturing industry? Should not all parties unite to support British industry, rather than engaging in the sickening display of humbug that we witnessed last night?

Mr. Aitken: Now that the political temperature may have returned to normal, the political co-operation that has characterised the attitude of hon. Members on both sides of the House towards the EFA project will continue to be very welcome. Prospects for a new EFA have brightened considerably in the light of Chancellor Kohl's positive statements at the Anglo-German summit on 11 November, and the industry has identified considerable cost reductions in its survey. In view of those factors, we hope that positive progress can be made towards the fulfilment of the production phase of this four-nation project.

Mrs. Dunwoody: Is the Minister aware that the defence industry also includes the royal ordnance factories, which the Government sold off? Does he realise that there is a large and continuing haemorrhage of jobs away from the industries concerned—on a so-called voluntary basis—

and no clear planning about which of those important factories are to be retained? Will the Minister instigate an immediate investigation into how the units are to remain viable?

Mr. Aitken: I have some sympathy with the point that the hon. Lady has rightly made. We are now discussing with Royal Ordnance and others the placing of longer-term contracts, which will ensure a longer-term future for manufacturers of that type.

Mrs. Ann Winterton: Does my hon. Friend accept that the prospects of small-arms manufacturers in this country —and, in particular, at Radway Green in my constituency —depend greatly on the Ministry of Defence not opening its order books to bids from other European countries that do not reciprocate? Furthermore, does he accept that it is vital to maintain our manufacturing capacity, for strategic reasons?

Mr. Aitken: As I am sure that my hon. Friend recognises, we already place approximately 90 per cent. of the equipment budget, in terms of orders, with British companies. That is a record of which we can be rightly proud, as can the industries concerned.
I know about the difficulties experienced by the Royal Ordnance factory at Radway Green. I assure my hon. Friend—as I have just assured the hon. Member for Crewe and Nantwich (Mrs. Dunwoody)—that we are considering the possibility of offering longer-term contracts, which should allow longer-term security for those organisations.

Mr. Foulkes: I am grateful to the Minister for the helpful comments that he made earlier about the European fighter aircraft. Is he aware, however, that the important all-party consensus on EFA was endangered last night by the Secretary of State's intemperate reply to yesterday's debate? Is the Minister aware that our support for EFA is aimed not just at the jobs of our constituents, but at securing the best possible fighter aircraft for the Royal Air Force, and for the air forces of our partners and of all other democracies?
Our arms sales policy, however, excludes the sale of arms to military dictatorships. Will the Government—[Interruption.] The other Minister of State will find himself in the "Guinness Book of Records" for other reasons if he is not careful.
Will the Government state clearly whether they share the view that there must be no arms sales to any military dictatorship?

Mr. Aitken: I understand why the Opposition are feeling a little bruised, if not carved up, after last night's superb winding-up speech by my right hon. and learned Friend the Secretary of State for Defence. The hon. Gentleman is obviously still suffering from the morning-after feeling. He has enunciated an extraordinary new Opposition policy: that we should sell arms equipment only to democracies. That might be all very well in an ideal world, but on 13 October the hon. Gentleman advocated that the Government should make much more vigorous efforts to sell the Challenger tank to Kuwait, which is not yet a democracy. We constantly receive letters from Opposition Members regarding arms sales to all sorts of countries which are not democracies. I do not believe, therefore, that the Opposition have yet come down from their double-standards perch.

Dame Elaine Kellett-Bowman: Does my hon. Friend accept that the observation that the prospects for the European fighter aircraft have brightened will be very much welcomed in my constituency? Will he congratulate those who made such a wonderful effort to bring down the cost of EFA to suit the pockets of all those concerned?

Mr. Aitken: I agree entirely with my hon. Friend's point. The aerospace industries of this country responded superbly to the challenge that they were set to bring down the costs. Their surveys reveal that there is a maximum cost-saving potential of 30 per cent. which, as my hon. Friend said, will bring EFA's cost well within the target mentioned by the German Defence Minister some months ago.

Nuclear Weapons (Testing)

Mr. Jon Owen Jones: To ask the Secretary of State for Defence what plans he has to announce changes to Government policy on testing nuclear weapons.

Mr. Archie Hamilton: The Government continue to believe that a minimal testing programme remains the best means of ensuring the safety and credibility of our deterrent.

Mr. Jones: As President-elect Clinton has said that he intends to go ahead with a comprehensive test ban treaty and as France and Russia have intimated that they are happy about going ahead with a comprehensive test ban treaty, can the Minister first tell the House where we shall be able to test our nuclear weapons? We do so in America at present. Secondly, does the Minister not feel embarrassed—I certainly would if I were he—that we are making common cause with the likes of Iraq and China in going ahead with the testing of nuclear weapons?

Mr. Hamilton: It is surely the problems in Iraq, China and other countries where proliferation is taking place that make it so important that we maintain a deterrent. If we are to have a nuclear deterrent, it is important that it should be both safe and effective. For that reason, we believe that a limited amount of testing is important.

Mrs. Gorman: While discussing weapons testing, will my hon. Friend assure the House, and also our good friends in Australia, that the rehabilitation of the Maralinga site remains of great importance to the Government?

Mr. Hamilton: Yes. That Australian Government have had talks with my hon. Friend the Minister of State for Defence Procurement on the rehabilitation of the Maralinga site. Those discussions continue and the question of compensation is being raised.

Mr. Menzies Campbell: Perhaps I may put a direct quotation to the Minister:
The reliability, effectiveness, safety and security of our nuclear arsenal can be maintained without nuclear tests.
Those are not my words, but the words of Carson Mark, the former head of the theoretical division of the Los Alamos laboratory in the United States. Why will the Government not accept his advice and throw their weight behind a comprehensive test ban treaty?

Mr. Hamilton: We do not believe that we have yet reached the stage where we can carry out the effective testing of nuclear warheads in other ways. The view of that

man may be as the hon. and learned Gentleman states, but it is not shared by our experts who deal with nuclear warheads.

Mr. Day: Does my right hon. Friend agree that, despite the so-called peace dividend, the world is in its most precarious state, certainly in my lifetime? There is an air of unpredictability and therefore danger, so it is essential that the Government do all in their power to maintain the credibility of our nuclear force, including continuing with testing.

Mr. Hamilton: I am grateful for my hon. Friend's support. We hope that the Trident system will run for another 30 years, and it is difficult to foresee what development will take place in the world over such a long period. The proliferation of nuclear weapons seems to be a continuing trend, despite the great international efforts that have been made to constrain it.

Dr. Reid: Why are the Government so obstinate on this point? Why do they think that everyone is out of step except them? Is the Minister aware that in another place the Under-Secretary of State, Viscount Cranborne, said that the United States congressional legislation which restricts nuclear testing is "unwise and misguided"—

Madam Speaker: Order. If the hon. Gentleman recalls, I said yesterday that there should be no quotations during Question Time. Will he paraphrase, please?

Dr. Reid: rose—

Mr. Skinner: The Liberal just quoted.

Madam Speaker: Order. I make it clear to the entire House—there seems to be some confusion—that there is no quoting whatsoever in Question Time.

Dr. Reid: I defer to your guidance, Madam Speaker. The Under-Secretary of State is reported to have said that the United States congressional legislation, which restricts nuclear testing, is unwise and misguided. As one of the co-sponsors of the legislation is the new Vice-President elect of the United States, do the Government still agree with that view? Do they wish to revise it, or do they believe that the new Vice-President is following an unwise and misguided course?

Mr. Hamilton: We have always made our position clear: we think that a limited testing programme is important, and we shall be unhappy if the United States does not decide to continue with one. The hon. Gentleman suggests that we are alone on this, but that is not so. The French are considering their policy on tests, and it is not guaranteed that all nations with nuclear weapons will give up testing.

Arms Sales (Saudi Arabia)

Mr. Denham: To ask the Secretary of State for Defence if he will make a statement on arms sales to Saudi Arabia.

Mr. Aitken: We welcome the recent reaffirmation of Saudi Arabia's commitment to the Al-Yamamah project, which remains as strong as ever. Discussions are continuing on the range of defence equipment required by Saudi Arabia in the future.

Mr. Denham: Is the Minister aware that in 1988 Vosper Thornycroft shipyard in Southampton was promised six orders for minesweepers? To date, funds for three have been committed and for the first time the yard has an empty glass reinforced plastic berth. In the absence of an effective defence diversification programme, the orders are vital to maintain the viability of the company and future employment. What prospects does the Minister hold out that those extra orders will be forthcoming?

Mr. Aitken: The speed and nature of Saudi Arabian defence orders are a matter for the Saudi Arabian Government. I can understand the hon. Gentleman's impatience on behalf of his constituents, but I remind him of the legendary gravestone which is said to lie somewhere near Riyadh: "Here lies the European who tried to hurry the Saudi Arabians." They must move at their own pace. I know that the hon. Gentleman will wish to congratulate Vosper on the sale not only of three minehunters to Saudi Arabia but of two Corvettes to Oman and four strike craft to Qatar. I was interested in the recent policy announcement by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), as none of those countries appear to be democracies. Should the orders be sent back, I wonder?

Mr. Mans: Does my hon. Friend agree that the Al-Yamamah programme is of especial interest to the north-west because of the number of jobs there and because of the effect that it has on the economy of the north-west? Bearing that in mind, will my hon. Friend give me some ides of the prospect of Saudi Arabia ordering further Tornados?

Mr. Aitken: As I said, what Saudi Arabia orders in the way of Tornados or of any other defence equipment must be a matter for the Saudi Arabian Government. The Tornados and the orders have already represented 33,000 jobs for the north-west. It is a major project and I am glad that there is bipartisan support in the House for it.

Arms Sales (Iran and Iraq)

Mr. Janner: To ask the Secretary of State for Defence if he will make a statement about his Ministry's policy towards the export of military equipment and technology to Iran and Iraq.

Mr. Aitken: Our policy is to support the United Nations embargo on exports to Iraq, and to permit exports to Iran only within the policy announced by the then

Mr. Janner: What assurances can the Minister give that unlawful exports of military equipment and technology will not recur, or are not continuing now? Have the Government put in place any procedures—and, if so, what procedures—to prevent unlawful exports to Iraq after the recent revelations of disgraceful exports?

Mr. Aitken: We debated these matters at great length yesterday. A little humility from the Opposition would not come amiss. After all, theirs is the party which authorised massive arms sales to Argentina when it was in government. It needs to be said that all Ministers who have been trying to exercise their judgment in a difficult area in which the conflicts are often different have been motivated by only one wish—certainly to keep within the law and certainly to act in Britain's best national interests.

Mr. John Marshall: In considering arms exports to the middle east, will my hon. Friend consider allowing exports to the only democracy in the middle east?

Mr. Aitken: Sales of defence equipment to Israel have been restricted since 1982 in response to the Israeli invasion of southern Lebanon. The restriction will remain in place until Israel withdraws completely in accordance with United Nations Security Council resolution 425.

Dr. David Clark: In view of the well-founded evidence that there was a lucrative, illegal arms trade from this country to Iran and that that trade was headed by a British company, Allivane, is the Minister prepared to give the House a categorical assurance that the illegal trade to Iran, which breached the Government's own guidelines, will fall within the purview of Lord Justice Scott?

Mr. Aitken: Lord Justice Scott is perfectly entitled to inquire into that matter should he wish to do so. The Allivane allegations, which have been made in correspondence and in a speech by the hon. Member for Glasgow, Shettleston (Mr. Marshall) last night, have not been substantiated by the inquiries that my Department has been able to make so far. We await further evidence on the matter which has so far not been forthcoming, despite requests, from the principal figure concerned, Mr. Machon.

Lady Olga Maitland: Will my hon. Friend tell us about the considerable number of Opposition Members who have been queuing up to press the case for arms and weapons companies in their constituencies—

Madam Speaker: Order. That is scarcely the Minister's responsibility. If the hon. Lady can rephrase her question, I will accept it.

Lady Olga Maitland: Will my hon. Friend detail to us the companies situated in constituencies represented by Opposition Members which have been lining up to press their case for selling weapons to other countries? Does my hon. Friend agree that that is disgraceful in the light of the Opposition's comments in yesterday's debate?

Mr. Aitken: I think that I have got the gist of my hon. Friend's question. She is right that hon. Members have written constantly to Ministers in my Department urging us to take more and more vigorous steps to support defence exports to all sorts of countries, by no means all of which are democracies. To illustrate and amplify my hon. Friend's point, I can do no better than to quote from the distinguished commentator Hugo Young in today's edition of The Guardian—

Hon. Members: No!

Madam Speaker: Order. The Minister is perfectly correct in his quotation if he is not quoting from Hansard in the House of Lords.

Mr. Aitken: I am glad that it is all right to quote from The Guardian. I do so now with relish. Mr. Young wrote:
There is a fair amount of humbug in the case against the Government.
That is the position.

Oral Answers to Questions — PRIME MINISTER

Engagements

Q 1. Mr. Amess: To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have been asked to reply.
My right hon. Friend the Prime Minister is attending a lunch—[Interruption.] given by the Lord Mayor and the Corporation of the City of London to celebrate the 40th anniversary of the accession to the throne of Her Majesty the Queen—[Interruption.] I understand that the Leader of the Opposition is also there.

Mr. Amess: Basildon now being regarded as the barometer for national and international opinion, is my right hon. Friend aware that there is a most favourable reading following the excellent autumn statement and the outcome of the settlement of the GATT round? Will my right hon. Friend take the opportunity to appeal to politicians of all parties to talk up this wonderful country of ours rather than so treacherously talking it down, safe in the knowledge that he bats for Braintree as I bat for Basildon?

Mr. Newton: I agree that, throughout the county that my hon. Friend and I have in common, the measures announced by my right hon. Friend the Chancellor and the achievement of my right hon. Friend the Prime Minister in relation to GATT have received a great welcome. I am tempted to extend my hon. Friend's alliteration by saying that my right hon. Friend the Prime Minister is batting for Britain, but in fact he is batting for the whole world economic community and it is time he was given credit for his success.

Mrs. Beckett: Is the Lord President aware that while the Prime Minister, desperate to have something to show for a lacklustre British presidency, has been scurrying around Europe talking up the prospects of a European growth package, in Brussels today the Chancellor has been steadily talking it down? Which of them speaks for the Government?

Mr. Newton: My right hon. Friend the Chancellor has been doing no such thing. ECOFIN, in which he participated, had a very important discussion yesterday directed to the growing concern about the recession in the Community and considered how, individually and collectively, the countries of the Community could work to improve the prospects of recovery on lines very similar to those adopted for this country in the autumn statement.

Mrs. Beckett: But are not the chaos and confusion arising because, even though 1,000 British jobs have been lost in every day of the United Kingdom presidency, the growth package, instead of being at the top of the presidency agenda where it should have been, is a half-hearted afterthought?

Mr. Newton: If there is any chaos and confusion, it is with Her Majesty's Opposition, who fought the election campaign on a programme which they have since acknowledged would have made the recession significantly

worse, and who continue to advance measures—a minimum wage, a payroll tax, the social charter—which would end all prospects of recovery.

Mr. Bates: Will my right hon. Friend join me in congratulating the employees of Nissan UK, who have achieved the European car of the year award for the British-built Micra? Does he also agree that that further demonstrates a transformation of the British car industry from one renowned for poor quality and militancy under a Labour Government to one renowned for high quality and high achievement, of which we can all be proud, under this Government?

Mr. Newton: Yes, indeed, and it is an achievement that I view with particular pleasure in view of the connection that I had with the economic problems in and around Sunderland some years ago. It is a major achievement for the new industries that we have brought to that area that Nissan has won the award for its car. It will form part of an achievement to which I look forward—that of this country becoming a net exporter of cars for the first time in many years.

Mr. Raynsford: To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

Mr. Newton: I have been asked to reply.
I refer the hon. Member to the answer that I gave some moments ago.

Mr. Raynsford: Is the Minister aware of the report published yesterday by the Engineering Employers Federation, which highlights the urgent need for a strategy to regenerate Britain's industrial and manufacturing base, and its conclusion that the Department of Trade and Industry lacks both the competence and the commitment to achieve that? If the President of the Board of Trade is not going to intervene before breakfast, before lunch and before tea, will the Leader of the House urge the Prime Minister to do so when he gets back from lunch?

Mr. Newton: I have just referred to the achievements of an important part of British manufacturing industry, which is significantly more successful than it has been for many years and certainly more than it was under the administration of Opposition Members. If I ask anyone to read anything, I shall invite them to read the hon. Gentleman's recent article, in this month's Fabian Review about the Opposition, entitled, "Sleepwalking Into Oblivion?"

Dr. Liam Fox: Does my right hon. Friend welcome reports that the Germans will, after all, play a full role in the European fighter aircraft project, with all the implications that that has for British jobs? Does not that and the GATT round negotiations imply a triumph for the Prime Minister's quiet style of international diplomacy?

Mr. Newton: I believe that it does and, referring back to a previous question, it shows the efforts made by my right hon. Friends the Prime Minister and the President of the Board of Trade and my right hon. and learned Friend the Secretary of State for Defence to advance the interests of British manufacturing industry.

Mr. Winnick: To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

Mr. Newton: I have been asked to reply.
I refer the hon. Member to the answer that I gave some moments ago.

Mr. Winnick: Does the Leader of the House accept that it shows no lack of respect to the Queen to suggest that the full cost of restoring Windsor castle should not fall entirely on public funds? Will that be considered by the Cabinet, and can the Leader of the House tell us whether the Cabinet have ruled out entirely the possibility of the Queen paying at least some income tax on her vast investment income?

Mr. Newton: On the latter part of the question, I have nothing to add to the reply given by my right hon. Friend the Chancellor of the Exchequer to the hon. Member for Coventry, South-East (Mr. Cunningham) on 3 November. On the first part of the question, the position is well known. The fabric of Windsor castle is state property and has long been recognised as such. All that my right hon. Friend the Heritage Secretary said yesterday was in acknowledgement of that simple fact.

Mr. Riddick: To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

Mr. Newton: I have been asked to reply.
I refer my hon. Friend to the answer that I gave some moments ago.

Mr. Riddick: Does my right hon. Friend agree that the measures contained in the autumn statement to help industry, along with the recent reductions in interest rates, are beginning to provide that vital ingredient—confidence —among industrialists? Does he share my pleasure at the somewhat unexpected support for the autumn statement last Thursday evening—either out of incompetence, which seems likely, or out of conviction, which seems less likely —from Her Majesty's loyal Opposition?

Mr. Newton: I share my hon. Friend's view of the autumn statement's reception—not least its emphasis on capital programmes and the measures directed towards the housing market, to the release of local authority receipts, to capital allowances and to export credits. There is a long list of comments from people in British industry supporting those measures. I am bound to wonder whether the occupants of the Opposition Front Bench could produce a list of any length in support of what they have put forward.

Sheffield

Mr. Michie: To ask the Prime Minister when he next plans to visit Sheffield.

Mr. Newton: I have been asked to reply.
My right hon. Friend the Prime Minister is making plans for a series of visits to all parts of the country— [Interruption.] Wait for it! He hopes to include Sheffield among them.

Mr. Michie: I am sure that we can cope with that threat. Indeed, we look forward to the right hon. Gentleman's visit. Is the Leader of the House aware that we hope that, during that visit, the Prime Minister will go around Sheffield's housing stock in the public sector, which is in need of repair, rebuilding and refurbishment? Is the right hon. Gentleman further aware that it is to be hoped that, during that visit, the Prime Minister will display the same

generosity in the provision of money to pay for repairing those houses as he has displayed towards Windsor castle, bearing in mind the fact that the tenants of those houses actually pay rent and taxes and that everyone's home is their castle?

Mr. Newton: I have already commented on the indirect thrust of the hon. Gentleman's question. With regard to help for Sheffield, the Government provided £26 million of assistance for projects associated with the student games.

Engagements

Mr. David Evans: To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

Mr. Newton: I have been asked to reply.
I refer my hon. Friend to the answer that I gave some moments ago.

Mr. Evans: Will my right hon. Friend send a message to the Prime Minister saying that we on the Conservative Benches have total loyalty to Her Majesty the Queen— [Intervention.] and her Prime Minister?
When will the Asylum Bill become law? Is my right hon. Friend aware that 28 people were arrested for having 70 false identity cards? We know that the lot opposite could not care less whether the number was 700, 7,000 or 70,000 —"Let them all in," they say—but the British people and I want to know when the Bill will be on the statute book.

Mr. Newton: The answer to the first part of my hon. Friend's supplementary question is that I shall take the greatest possible pleasure in communicating to my right hon. Friend the Prime Minister my hon. Friend's great declaration of loyalty and the support that it drew, I judged, from both sides of the House.
The answer to the second part is that while I cannot give my hon. Friend an exact date, his question contained a message that I can also communicate to the Home Secretary, to urge him on in his efforts, and perhaps a message for Her Majesty's Opposition in terms of the importance that is attached to the passage of that measure.

Ms. Corston: Why has the Prime Minister, as President of the European Community, put Tory party unity before the needs of the EC in such a way that it has caused the French Trade Minister to describe the British presidency as the "most calamitous" that he had ever seen?

Mr. Newton: It is clear that, as a result of his presidency of the European Community in the past few months, my right hon. Friend has played a crucial part in achieving the GATT settlement that is now in prospect.

Sir Anthony Durant: To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

Mr. Newton: I have been asked to reply.
I refer my hon. Friend to the reply that I gave some moments ago.

Sir Anthony Durant: Does my right hon. Friend agree that my right hon. Friend the Prime Minister deserves our support and congratulations for what he has done on the GATT round and that that has been an important achievement for most of the world, including the


underdeveloped territories? Does he further agree that it would be wrong for a small group of French farmers to hold up that vital agreement?

Mr. Newton: My hon. Friend makes an important point. In congratulating my right hon. Friend the Prime Minister, perhaps we should also recognise the contribution made by Mr. Andriessen, Mr. MacSharry from the Community, Mrs. Hills—[Interruption.] It is right that we should recognise that the part played by my right hon. Friend has contributed to the efforts of others in an important way, including those whom I mentioned and Mr. Madigan from the United States. We have ensured that that negotiation now has a chance to reach a conclusion. I share the hope that my hon. Friend has expressed that it will not be frustrated by people in whose overall interests that agreement is.

Mr. Michael: To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

Mr. Newton: I have been asked to reply.
I refer the hon. Member to the answer that I gave some moments ago.

Mr. Michael: Is the Lord President aware that the reply given to me yesterday shows that the level of aid to Somalia was less than during the years of bloody dictatorship under Siad Barré? Will he undertake that the Government will at least restore total aid to the level of 1987 and meet Britain's historical responsibility to the people of Somaliland in the north?

Mr. Newton: I understand that the principal problem in Somalia is not the shortage of funds but the difficulty in distributing the aid that we are keen to provide. As the hon. Gentleman well knows, the aid budget for next year was effectively projected in the autumn statement.

Madam Speaker: Time's up. We must now move on to the statement. Mr. Secretary Brooke.

British Broadcasting Corporation

The Secretary of State for National Heritage (Mr. Peter Brooke): rose—

Madam Speaker: Order. Would Members who are leaving the Chamber please do so quietly and quickly, so that we may proceed with our business?

Mr. Hartley Booth: On a point of order, Madam Speaker.

Madam Speaker: Order. The hon. Gentleman knows that I do not take points of order until the end of questions and statements.

Mr. Brooke: With permission, Madam Speaker, I should like to make a statement about the future of the British Broadcasting Corporation.
The BBC's present royal charter, granted in 1981, expires at the end of 1996. We now have an important, and rare, opportunity to consider the role, objectives, organisation and funding of the BBC in the years ahead. Earlier this year, in our general election manifesto, we said that we would issue a discussion document about the future of the BBC taking account of its special responsibilities for providing public service broadcasting.
I am publishing that discussion document today. It is right that I should acknowledge the work done by my right hon. and learned Friend the Member for Putney (Mr. Mellor) in taking the preparation of this document to an advanced stage.
I should like to take this opportunity to say something about the context of this debate on the future of the BBC. Broadcasting is changing rapidly and radically both in this country and throughout the world. Everywhere, the number of services is increasing, as new television channels and new radio stations open, using cable and satellites as well as conventional methods of transmission. Increasingly, programmes and services are being designed for audiences in more than one country and some services can be received in millions of homes throughout Europe.
The position is unrecognisable from that which existed a few years ago, and has altered even within the last year. In the foreseeable future there will be opportunities for even more services, on satellite and cable systems. Looking further ahead, the introduction of digital transmission may ultimately increase the number of channels which can be provided, first from satellite and eventually on the terrestrial network. We expect digital audio broadcasting to provide more radio services in this country in the next three or four years.
Since broadcasting began some 70 years ago, and until quite recently, there have been few outlets and little difficulty in finding programme material to broadcast. In this country we devised a framework which enabled broadcasters to achieve diversity and quality in their programmes. Now, the number of outlets is increasing and all the outlets are looking for material to broadcast.
This opens up new prospects for United Kingdom broadcasters both in this country and throughout the world. In this country the BBC's services are popular and widely used. Over 90 per cent. of the population use the BBC's television services every week; about 60 per cent. use its radio services. The BBC's services are part of the daily life of the majority of people in this country. As I

know from the letters I receive, and as all hon. Members will know, our constituents often care deeply about the programmes it broadcasts.
Externally, the BBC's World Service Radio, which this year celebrates its 60th year of broadcasting, is highly respected, particularly for the reliability of its news. The service is estimated to have 120 million regular listeners. BBC World Service Television, which is a commercial venture, is already providing news and current affairs programmes throughout most of the world. Internationally, there are new opportunities for the BBC and for other British broadcasting organisations and programme-makers.
The Government believe that the BBC should continue as a major public service broadcasting organisation, but that is not to say that there is no need for changes. Change there has to be if the BBC is to meet the new challenges that are being created by changing circumstances.
However, there are a number of possible ways forward. In the discussion document, we have tried to set out some of the advantages and disadvantages of a variety of options. We now wish to listen to the arguments and to weigh them, before deciding on the proposals to bring before the House.
The essential issues in the debate are likely to be the future objectives of public service broadcasting; the range of the BBC's programmes, services and functions; how the BBC should be financed; how it should be organised to provide its services more efficiently; and the ways of making the BBC responsive to its audiences and accountable for its services. All those issues are linked and need to be seen as part of a coherent policy for the future.
I hope that there will be a well-informed, considered and constructive debate. The BBC will shortly publish its own proposals for its future. I would like to encourage other major organisations to publish their responses to the discussion document and the BBC's proposals. In that way, we should all have a better understanding of the issues and that should help us to reach sensible decisions.
I am particularly anxious to hear the views of the public about the BBC's services. I would like to hear what audiences want from the BBC. I am therefore publishing a short popular version of the discussion document, which I plan to make available in public libraries and citizens advice bureaux.
The BBC has its supporters and its critics on both sides of the House, but I hope that, in pursuing an informed debate with a degree of passionate interest, we shall not forget that the BBC has informed, educated and entertained most people in this country for most of their lives.
The BBC has both embodied and communicated our national heritage. There are fundamental questions to be asked about the future of public service broadcasting and the role of the BBC in providing it. The Government believe that the public service broadcasting organisations exist to serve their audiences, and it is the wishes, interests and needs of audiences that we should keep at the forefront of our minds as we consider the BBC's future after 1996.

Mrs. Ann Clwyd: The Minister delivered his speech as quickly as he apparently expected me to read the document. It is insulting to the House to deliver a 43-page document half an hour before it is due to be discussed.
I begin by welcoming the publication of the Green Paper. At least we now know where the Government stand and what we have to oppose. The Minister has assured the House that the next five months will be a period of widespread consultation. We trust that will be so. The Labour party will wish to make its own significant contribution to that debate.
Labour's media policy will be based on the principles of freedom; the absence of censorship; the ability of broadcasting authorities to present alternative views of the world; choice; access; quality; and accountability. On public service broadcasting, accountability should be not to the Government but to the public.
The Minister made it clear that for no broadcasting organisation, including the BBC, is the status quo an option. The need to sharpen efficiency is clear to all. No one would disagree about the need for increased efficiency and accountability. We also want an expansion of the excellent and respected BBC World Service, both radio and television.
The Labour party remains completely committed to the concept of public service broadcasting. We are concerned about certain elements of the Minister's statement. Naturally, we all favour wide consultation, but we want to see a reassertion of the value of public service broadcasting at the forefront of the Government's proposals in five months' time.
The Labour party will oppose any attempt to privatise the BBC, even at its edges. Privatisation of the BBC will face a united Opposition in the House, and the opposition of millions of people up and down the country. Will the Minister take into account the views of people such as Sir David Attenborough, the distinguished natural history programme maker, who has warned against the "castration" of the BBC by the Government, and voiced the fear that, under the Government, the BBC is being
gravely eroded, the morale of its staff seriously damaged and the very things that gave it its unique stature and strength destroyed.
We shall guarantee the funding of public service broadcasting by the BBC, and believe that the licence fee should continue as the basis for financing the BBC. Will the right hon. Gentleman join us today in making that commitment? Will he support index-linking the licence fee for at least 10 years—the same period as the BBC's charter? [HON. MEMBERS: "No."] Obviously, Conservative Members have made up their minds even before the consultation process has started. Does the right hon. Gentleman agree that index-linking the fee would ensure stability for the BBC and enable it to be free of any attempt at editorial control, by the Government or anyone else?
In a lecture to the Royal Television Society a few weeks ago, the right hon. Gentleman spoke about editorial independence, and said that it was his intention to uphold the tradition that Ministers responsible for broadcasting policy do not interfere in the content of individual programmes. That may be his personal preference, but what about the rest of his colleagues? How does the right hon. Gentleman explain "Tumbledown", "Death on the Rock", "Real Lives" and the Zircon programme? Does he agree that the Government have debased democracy by their handling of such programmes?
Is the right hon. Gentleman conscious of the fact that the BBC board of governors has come in for many legitimate attacks from various quarters? It has too often rolled over at the whim of politicians and retreated at the

first whiff of displeasure from the Government.[Interruption.] The very gentlemen who have put pressure on the BBC are making the loudest noises this afternoon. The board of governors has been discouraged from making the sort of programmes that embarrass and infuriate Governments.
Will the Minister assure us today that the misuse of patronage—a feature of the Government's years of office —will now be coming to an end? Will he in future appoint people who have the bottle to defend the BBC, assert its rights and create a public row when it comes under threat? One of the options in the document is a Public Service Broadcasting Council. In our view, that is little more than the machinery that the Government and their supporters would use to undermine the principle of public service broadcasting—death by a thousand cuts.
I shall ask the Minister three questions. Is not the Public Service Broadcasting Council to be used as a Trojan horse by the supporters of a completely free market in television—a back-door method of privatising the BBC? Does he agree with his predecessor, the right hon. arid learned Member for Putney (Mr. Mellor), who said today on television that such a suggestion would mean dismembering and driving a stake through the heart of the BBC?
Does the Minister accept that, if the proceeds of the licence fee are to be open to commercial broadcasters to make the sort of programmes that the Government refused to oblige them to make under the Broadcasting Act 1990, that will mean less cash for the BBC to make programmes? Will he understand that, if this were to provoke the BBC to seek to maintain revenue by taking limited TV advertising, that would compromise the editorial independence of the BBC and imperil the financial base of the new Channel 3?
If the BBC is to get less of the licence money through the PSBC, is it then expected to sustain programme quality and diversity at regional and national level, and its paramount contribution to live music and the arts? [Interruption.]

Mr. Michael Fabricant (Mid-Staffordshire): The hon. Lady would do credit to the BBC drama department.

Mrs. Clwyd: I am amazed that hon. Members are so dismissive of very important principles on public service broadcasting.
Does the Minister understand that, even before the debate starts, the loss of 7,000 jobs in the BBC by the end of the year threatens its long-term programme-making ability at a time when many of the commercial channels have opted out of production? How can the Minister defend that, when it has all been done without the knowledge of viewers and listeners, and before the shape of the BBC into and beyond the next century has been decided?
The BBC used to pride itself on being a centre of excellence. Is the Minister aware that the morale of those working for it has been severely undermined, because they feel that the values that gave it its strength and stature are under challenge?
Does the Minister acknowledge that the debate over the future of the BBC has added importance because of the botched fiasco of the blind bid auction of commercial TV licences carried out by his Government, which put cash before quality and which will restrict the range and variety


of programmes before the end of the year? What proposals does he have to take action against commercial television which does not live up to the promises about quality?
Finally, we are not alone in having no faith in the Government's willingness to restore and sustain the independence and integrity of the BBC, given their constant attacks upon it and the expensive mess they have created in commercial television and within ITN. It is to Labour that viewers and listeners must look to promote the unique role in broadcasting which the BBC has earned and which the Labour party wants to encourage in the years ahead.

Mr. Brooke: The hon. Lady's observations, at least in their early stages, were stronger on asseveration than on interrogation. She enunciated the significant contribution that the Labour party would make, and then read out a considerable agenda. In the process, she clearly showed that she had read the discussion document, because those subjects are all contained within it.
She indicated that her test of the conclusions of the Government at the end of the consultation period would be the assertion of the importance of public service broadcasting. That assertion has been made at the beginning of the consultation process, and I would be astonished if it was not made at the end.
The hon. Lady quoted Sir David Attenborough, and I am delighted that he is making his contribution to the debate. I hope that many other distinguished contributions will be made too.
As to the licence fee, on which the hon. Lady gave us the Opposition's view, we shall want to consider all the options for financing the BBC. That is the process of consultation, but so far none looks obviously better than the licence fee.
The hon. Lady attacked the board of governors. I have no hesitation in defending it, just as it defends the BBC itself.
The hon. Lady made a lengthy contribution, including questions, on the Public Service Broadcasting Council. I made it clear in advance of publication of the document that my attitude towards the consultation process is open-minded. Clearly, it would have been less than open-minded if that element had not been part of the agenda of the exercise.
The hon. Lady made some observations about the management of the BBC at present. Although we are looking to the renewal of the charter in 1996, the BBC has to continue to manage itself during the interim period, and I am not in the least surprised that it is taking steps under current circumstances.
The hon. Lady said that the morale of the BBC was in severe straits because it was under challenge. I have to ask her what Lord Reith would have said if anyone had told him that the BBC's morale was affected because it was under challenge. Lord Reith would have given a dismissive response to that observation.
The hon. Lady made proper reference to quality. In the context of the ITV transactions, the quality threshold came before the cash bid.
The hon. Lady ended as she began, with asseveration rather than interrogation.

Mr. John Gorst: Does my right hon. Friend agree that, when a multiplicity of commercial outlets leaves the BBC in a somewhat unique position, the definition of the phrase "public service broadcasting" should be revised, so that there is one for the BBC and a different one for all the other interests that are providing television programmes?

Mr. Brooke: On pages 16 and 17, the discussion document deals with the question of how public service broadcasting should be defined, and its particular component parts are specifically identified. The question which my hon. Friend asks may well emerge out of the consultation process.

Mr. Robert Maclennan: Does the Secretary of State accept that, when the charter is renewed, the House and the Government will be judged not just by the dangers that we have circumvented but also by the opportunities that we have grasped; and that the major danger, which is inherent in the Government's Green Paper and was explicit in the debates on the Broadcasting Act 1990, is that the BBC will be put on starvation rations and its public service role attenuated by a concept that embraces the idea that individual programmes are public service programmes rather than a totality of the service—which appeals some of the time to all of the people, but not all the time to everyone? The discussion paper allows the Minister a far-ranging debate, but will he acknowledge that the firm financial independence of the BBC is the basis of its role as a defender of free speech and of the nation speaking unto itself?

Mr. Brooke: I am grateful to the hon. Gentleman for his comments. He is aware of the scale of the BBC's present resources and revenues, although I recognise that some sub-division was implicit in his question. I acknowledge that firm financial independence is critical to the future of the BBC. I am also clear, although the hon. Gentleman did not allude to it himself, that, given the contribution which Britain makes through its various broadcasting organisations to the quality of broadcasting throughout the world, it is extremely important that we maintain a solid production base in Britain.

Mr. David Mellor: I thank my right hon. Friend for his Green Paper and the manner in which he has made his statement to the House today. As I understand it, he is asking the public to join in a full-hearted debate about the future of the BBC, and I congratulate him on that. There have been occasions when broadcasting policy has emerged after more cloistered consideration than that, and I am not sure that it was always to its benefit that it did so. Is it not right that the public, who after all watch hours and hours of television, as we all do, and listen to the radio every week, should have a view on the matter? It is their BBC, they pay for it, and it is right for the Government to ask their opinion before making up their mind.
Does my right hon. Friend also agree that the fact that the BBC has recently been able to announce a further £120 million out of existing resources for programming as a result of savings on its bureaucracy is a sign of the great advantages to everyone, not least the BBC, of having a BBC that is a modern organisation, not one structured as of yesterday? Does my right hon. Friend agree that it


would be most regrettable if the debate that he has opened by full-heartedly asking for opinions in a non-dogmatic way were to degenerate into a narrow partisan squabble? That would be to fall below the level of events, and I hope that right hon. and hon. Members in all parts of the House will take note of that.

Mr. Brooke: I am particularly grateful to my right hon. and learned Friend, and genuinely pay tribute to his contribution to the Green Paper's evolution. I absolutely endorse his remark that this is an invitation to public contributions to the consultation process. The BBC is a national institution that belongs to the public in the fullest possible sense. I agree with my right hon. and learned Friend that the savings that the BBC has been able to effect have the capacity to be ploughed back into extra quality.
I also endorse my right hon. and learned Friend's observation that, if we can make sure that the debate does not become partisan but is directed at the good of the BBC, we will have a better BBC at the end of it.

Mr. Roy Hattersley: Will the Secretary of State specifically reject the notion that the BBC, domestically at least, might be limited to a narrow range of programmes—many of which, if broadcast, might prove unattractive to private companies? Does the right hon. Gentleman agree that, without variety, public service broadcasting cannot succeed and might not survive—and that, were it not to survive, broadcasting in general would rapidly deteriorate?

Mr. Brooke: I am grateful to the right hon. Gentleman for his question. In its specific context, I will not precisely prejudge the debate and the consultation that is to take place, but I draw the right hon. Gentleman's attention to what I told the hon. Member for Caithness and Sutherland (Mr. Maclennan)—that an important feature of the whole process is that we should emerge with a major production base in this country that can give quality to the world.

Mr. Peter Bottomley: Does my right hon. Friend accept that, if we are to pay attention to the interests as well as the voices of listeners and viewers, we must maintain in the public service sector a variety of services, and let the BBC make an input into the various systems by which they will be transmitted?
I put one particular cash point to my right hon. Friend. Compared with the cost of satellite and cable subscriptions, less than £2 a week for the BBC is a boon to lower-income families and to pensioners, and they have a strong interest in maintaining the full BBC services.

Mr. Brooke: I am grateful to my hon. Friend for again emphasising the public's position. All of us taking part in the debate are conscious that the massive changes in technology that are occurring are becoming more available at economical prices. That not only enormously increases range and choice but makes more important the debate that we are to have on the BBC.

Mr. Gerald Kaufman: Will the right hon. Gentleman clarify the consultation period, as apparently stated on page 11 of the Green Paper, under which his Department asks for comments and replies before 30 April 1993? Such a time scale could preclude proper and appropriate inquiry by the Select Committee

on National Heritage. I hope that whatever time scale the hon. Gentleman lays down will not preclude the Select Committee conducting an appropriate inquiry.

Mr. Brooke: The Government and the right hon. Gentleman, as the Chairman of that Select Committee, were able to reach a concordat on a previous item of business that the Select Committee discharged, which enabled it to deliver its report in the time frame that it wished. I have every confidence that we will be able to effect a similar pattern of co-operation in future. Equally, I hope that the right hon. Gentleman feels that five months at least gives us a good start.

Mr. Richard Spring: I congratulate my right hon. Friend on his statement, in which he mentioned a wide open debate. How specifically will he incorporate discussion and debate on the BBC's future into the public domain?

Mr. Brooke: We specifically published the popular version of the Green Paper to which I referred in my statement, and which we will make widely available. I believe that it is also the case—and would be surprised if it were not—that the BBC, other broadcasting organisations, and the media generally will seek to enlarge the debate. If we can bring to it the passion and commitment that has characterised debates relating to particular channels, the public will have served us very well.

Mr. Dafydd Wigley: I welcome the reluctance of the Government in the Green Paper to consider advertising to raise funds for the BBC, not least because of the fragmentation that it may mean for commercial channels and the escalating number of cable channels. Does the Minister accept that the other side of that coin is the need to guarantee funding for the BBC? In that context, will he examine the need to develop English language television programmes emanating from Wales, to match the Welsh language programmes which have been developed so well, to give a full service to both language communities in Wales?

Mr. Brooke: I thank the hon. Gentleman for his statesmanlike observation about the productions that emanate from Wales. I cannot give him a precise commitment, but I caught the essence of his suggestion, and I respect him for it.

Mr. Richard Tracey: My right hon. Friend has made an excellent start to the debate. Behind the matter hangs the shadow of the size of the licence fee and the burden that it creates, especially for the elderly, who examine some of the services provided by the BBC—pop music channels with highly paid disc jockeys and variety programmes with, arguably, too highly paid presenters. Will my right hon. Friend examine whether those services are required in a public service broadcasting organisation? I suggest also that he consider some phone-in input for the public to open up the debate.

Mr. Brooke: When my hon. Friend studies the document in detail, he will find that it raises the question whether the various component parts should continue to be part of the BBC remit. Those of us who are engaged in the debate will welcome a multiplicity of ways in which contributions may be made.

Mr. Joseph Ashton: Is the Minister aware that the strongest resistance to the BBC comes from the poor—one-parent families, pensioners, and unemployed people who resent the £80 "poll tax" that they must pay? Is he aware that many of them never have that amount of money in one lump sum? That is why so many people do not pay the fee and the BBC must send out vans to detect those who do not pay.
Will the right hon. Gentleman promise to examine a system by which poor people can pay weekly amounts towards their television licence? By that, I do not mean a system by which people buy stamps a year in advance but still pay a lump sum of £80. Is it not time that the poor were able to afford the BBC licence with dignity, instead of spending—in the case of a single pensioner—a week and a half's income on it?

Mr. Brooke: I understand the hon. Gentleman's question. Although the figure is only 22p a day, I recognise that it is a large amount of money for some households. The way in which the fee is collected is a matter for the BBC. I am conscious that the BBC is examining alternative ways in which the fee might be collected, along the lines that the hon. Gentleman suggested.

Mr. Stephen Milligan: Will my right hon. Friend elaborate a little more on the proposal in the Green Paper for the Public Service Broadcasting Council? Is he aware that some Conservative Members are worried about the proposal because, if it is introduced, it will mean that less funding will be available for the BBC and more funding will be given to independent productions which might have been made in any case? "Brideshead Revisited" is a good example. It was a programme in the public interest but did not need public finance.

Mr. Brooke: I recognise that the references to the Public Service Broadcasting Council in the document suggest a variety of purposes to which the council might be put. However, I re-emphasise that we are talking about a consultation process. I have no doubt that other hon. Members besides my hon. Friend will want to make their contributions on the subject.

Mr. Clifford Forsythe: We in Northern Ireland welcome the opportunity of examining the charter of the BBC. I particularly welcome the part of the Minister's statement which referred to ways of making the BBC responsible to its audiences and accountable for its services. I hope that, when that matter is examined, the Government will ensure that the BBC pays attention to representations from its audiences and does something about them, rather than merely listening to them.

Mr. Brooke: The hon. Gentleman will join me in paying tribute to the services which the BBC renders in Northern Ireland. I attended the memorial service for Sir Richard Francis the other day, in which most memorable words were spoken about the role of the BBC in Northern Ireland. I am certain that accountability will mean not simply listening but demonstrating that the BBC, in the hon. Gentleman's phrase, pays attention to what its audiences are saying.

Mr. Alan Howarth: Does my right hon. Friend accept that there is a crucial need in broadcasting to prevent a decline into pervasive mediocrity induced by unmitigated commercialism? While

applauding his open-mindedness, may I urge him all the same to proceed on the assumption that the public service obligation of the BBC should be retained? Does he agree that the retention of the licence fee is likely to be a necessary means to that end?

Mr. Brooke: Yes. I reiterate to my hon. Friend both what I said in my original statement and what I said in answer to the hon. Member for Cynon Valley (Mrs. Clwyd). We strongly envisage that public service broadcasting will continue to play a key role in the BBC's activities at the end of the consultation period. I gave earlier the specific commitment for which my hon. Friend asked in his second question.

Mr. Andrew Faulds: In these examinations, and in view of the appalling proliferation of radio outlets of all sorts, most of which put out nothing but a load of rubbish, would it not be advisable that the BBC's commitment to light entertainment of a rubbishy sort and to local radio should be much diminished?

Mr. Tony Banks: Bring back "Journey into Space".

Mr. Brooke: As I said in answer to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), I shall not prejudge that issue. Debate on that issue is an essential part of the consultation process.

Mr. John Butcher: May I make my right hon. Friend reveal a little more of his own philosophy in these matters by asking him whether Melvyn Bragg is a monopoly? If he is, should he be regulated, deregulated or self-regulated?

Mr. Brooke: I am grateful to my hon. for the seductive temptation of his question. Mr. Bragg is someone whom I have got to know fairly recently, and I do not think that I should endanger my relationship with him immediately.

Mr. Alex Salmond: I am aware that Scotland, Wales and Northern Ireland are mentioned several times in the text of the Green Paper, but the Secretary of State will be aware that the section which deals specifically with those national broadcasting services is but two paragraphs in a 43-page document. Will he distance himself and the Government at this stage from any suggestion the Government underrate the opportunities that might arise for those national services if they can distance themselves from the dead hand of London control?

Mr. Brooke: The hon. Gentleman is well aware of the hours of Gaelic radio broadcasting which are already available. They are numbered in hundreds. The people of Scotland are lucky that those services are available.

Mr. John Greenway: Does my right hon. Friend agree that the BBC and ITV together have made a significant contribution to the culture and entertainment of the nation, and that we should think long and hard before upsetting the balance between a BBC funded by the licence fee and commercial television funded by advertising? Would it not be nonsense to create an Arts Council of the airways which would reduce the BBC's resources, in order to give money to commercial channels, which make significant contributions to the Exchequer?

Mr. Brooke: My hon. Friend seems to be taking the same corner that my hon. Friend the Member for Eastleigh (Mr. Milligan) took earlier. I am confident that he too will ensure that his voice is heard in the debate that we are about to have.

Mr. John Maxton: Does the Secretary of State recognise that the answer that he just gave the hon. Member for Banff and Buchan (Mr. Salmond), who represents the Scottish National party, will not be welcomed in Scotland? What Scotland wants is a guarantee that the important role played by BBC Scotland in both radio and television is recognised by him, as it is not in the document; a guarantee that BBC Scotland will continue in the future; and an assurance that its finance will be guaranteed.

Mr. Brooke: In the answer that I gave the hon. Member for Antrim, South (Mr. Forsythe), I sought to pay tribute to the quality of regional broadcasting in the territories. I gladly repeat that tribute for the hon. Gentleman's benefit.

Mr. Phillip Oppenheim: If we really believe in freedom of choice and the freedom of the individual, should we not allow people to watch what they want to watch, free from intervention by any self-styled council of the great and the good? By the same token, should we not stop forcing people to pay for services that they may not want to use?

Mr. Brooke: Let me repeat what I have already said to at least two of my hon. Friends. I am sure that my hon. Friend the Member for Amber Valley (Mr. Oppenheim) will make his own individual contribution to the debate that we are about to have. As I have said, however, I can think of no obvious improvement on the licence fee as a method of financing the BBC. It is therefore likely to form the basis on which the BBC's future will be secured.

Mr. Barry Jones: Only half a page of the document is devoted to Scotland, Wales and Northern Ireland. Will the Secretary of State tell us what he has in mind when he speaks of a "larger measure of autonomy" for those three countries? Will the views of people in Wales be expressed through a national council, or by some other means? Finally, what are the right hon. Gentleman's views on broadcasting in Welsh?

Mr. Brooke: The hon. Gentleman has sought, like others, to confine his observations relating to a particular part of the country to a narrow range of pages; the document, however, is directed at the BBC in the country at large. As he has said, it contains reference to a "larger measure of autonomy", and a balancing question is raised —how that can be secured without a duplication of effort. In any democratic society, that is a nice balance, and it will emerge in the debate.

Mr. Michael Fabricant (Mid-Staffordshire): Will my right hon. Friend confirm that, in terms of programme hours and output per licence fee, the BBC is one of the most efficient broadcasting organisations in Europe? Will he also confirm that, unlike Labour Front Benchers with their scaremongering—which, incidentally, would do credit to the BBC's drama unit—the National Heritage Department has reached no firm conclusion? This is a Green Paper, a discussion document, not a White Paper.

Mr. Brooke: I am grateful to my hon. Friend for his support.
I should have said in answer to the hon. Member for Alyn and Deeside (Mr. Jones) that there is already a substantial element of broadcasting in the Welsh language. If the hon. Gentleman wishes to enter into a private debate with me on the matter, however, I shall be happy to respond.

Mr. Bruce Grocott: Should we not recognise that part of the background to the Green Paper is the serious damage done to broadcasting by the Government's obsession with deregulation, along with the serious damage that resulted from the Broadcasting Act 1990 and the absurd franchise auction that took place then? It is ridiculous to see public sector broadcasting as a ghetto confined to a single channel. The ethos of quality programming should extend across all channels, and the Government must not undermine the other channels as they have done in the past.
Let me put a simple proposition to the right hon. Gentleman. The press in this country is governed by market forces—commercialism—and is held in low esteem throughout the world. Until very recently, broadcasting in this country was governed by principles of democratic regulation and control, and was admired throughout the world. I commend those good socialist principles to the right hon. Gentleman.

Mr. Brooke: I am sure that it was a slip of the tongue that caused the hon. Gentleman to refer to public sector broadcasting instead of to public service broadcasting. I do not share his condemnation of the British press. Large parts of the British press are widely admired. I agree with him about the respect in which British broadcasting is held. The intention of the consultation process is to make sure that that admiration is maintained.

Mrs. Teresa Gorman: Although I welcome the opportunity to debate the matter, I hope that my right hon. Friend will not mind my pointing out without any disrespect that there is an alternative to paying a licence fee —that is, not to have to pay a licence fee. Now that we have commercial stations, it is important that people who want to watch them and not the BBC should not be required to pay £80 a year for the privilege of having a television set in their house.
Elderly and poor people, for whom I would expect hon. Members opposite to make a particular case, resent having to pay the licence fee. There is no need for them to do so in the present climate. We know that the commercial outlets will give sponsorship to the BBC and provide money for healthy competition with the commercial channels, which are often alleged to be swimming in the stuff.

Mr. Brooke: I am absolutely sure that, when my hon. Friend, who is fair-minded, sees the references in the discussion document to the potential financing, she will agree that the options have been set out. It is now for the nation to respond in terms of consultation.

Mr. Tony Banks: Is it not a fact that most Members of the Conservative party and Conservative Members of Parliament have already made up their minds? They loathe the BBC, just as they love capital punishment. If the


Secretary of State could introduce capital punishment for the producers of "Panorama", those who sit on Conservative Benches would undoubtedly be overjoyed.
Will the right hon. Gentleman state clearly that he will publish the results of the consultation exercise, not hide them away? If the great weight of public opinion is that it wants the BBC to remain as it is, will the Secretary of State abide by that decision, or will he give way to the doctrinaire fools behind him?

Madam Speaker: Order. The hon. Gentleman said, "doctrinaire"—

Mr. Banks: Fools.

Madam Speaker: I deprecate the use of such language.

Mr. Banks: I apologise.

Madam Speaker: I am sure that the hon. Gentleman, who is one of the most articulate Members of this House, can find another phrase.

Mr. Banks: What about hon. dimwits, then?

Mr. Brooke: I have long admired the hon. Gentleman's precision of language, although not in this instance. I take issue with his observation that we on this side of the House, to use his phrase, "loathe the BBC." I made it clear in my statement that the BBC has supporters and critics in all parts of the House. That is what makes the debate worth while. I have made it clear in the foreword to the discussion document that I have lived abroad four different times for significant periods and that, as a consequence of that experience, I have a profound admiration for the service that the BBC provides.

Several Hon. Members: rose—

Madam Speaker: Order. We shall now move on.

Points of Order

Dr. John Reid: On a point of order, Madam Speaker. You will recall that yesterday, in reply to a point of order from the hon. Member for South Dorset (Mr. Bruce), you ruled that, when a Minister refers to an official document, that document has to be laid on the Table.
You will be aware that, during the debate on Iraqi exports, the President of the Board of Trade quoted from an official document, and that the matter was raised on a point of order by my right hon. Friend the Member for Chesterfield (Mr. Benn). He asked whether the ruling that you had made earlier in the day applied, at which stage the

Deputy Speaker ruled that the decision had been made that, when a Minister quotes from a "state paper", he must lay it on the Table. That ruling was much narrower than your ruling earlier in the day.
I understand, however, that, following a further approach late last evening, you agreed to consider the matter further and to give us your decision today. Is it in order to ask whether you have had time to consider the matter, and whether you can let us know your decision?

Madam Speaker: The President of the Board of Trade did quote yesterday from a paper. I can tell the House now that the whole of that document will be laid before the House.

Mr. Derek Conway: On a point of order, Madam Speaker. Following yesterday's debate in the House, has the hon. Member for Livingston (Mr. Cook) sought your permission to make a personal statement to substantiate his allegations that Lord Justice Scott has been "nobbled" by the Government? Many of us believe that he must be prepared to substantiate that scandalous allegation in the Chamber. Has he made such an application?

Madam Speaker: No application has been made by the hon. Gentleman.

Mr. Dennis Skinner: On a point of order, Madam Speaker. I heard yesterday's exchange on whether Lord Justice Scott would be compromised by the Government, in which my hon. Friend the Member for Livingston said, "Yes, I believe that Lord Justice Scott will be compromised by the Government." I believed it then, I believe it now and, quite frankly, the only reason why the Government are refusing an independent tribunal under the Tribunals of Inquiry (Evidence) Act 1921 is because they want to participate in setting up a whitewash inquiry.

Madam Speaker: No point of order arises.

Dr. David Clark: On a point of order, Madam Speaker. You will recollect that, earlier today during defence questions, I asked a supplementary question to Question 9, in which I raised the arms trade with Iran, which we believe may be illegal. I asked whether Lord Justice Scott's inquiry would cover relations and the arms trade with Iran, to which the Under-Secretary replied in the affirmative. To avoid any confusion, will you confirm that an assurance given to the House by an Under-Secretary overrides any decision or guidelines laid down by the Prime Minister?

Madam Speaker: The Chair makes no comment on the remarks of Ministers, at whatever level. The hon. Gentleman will have to find other means of probing the Government to obtain the information that he is seeking.

Development of Tourism for the Disabled

Mr. Harold Elletson: I beg to move,
That leave be given to bring in a Bill to encourage provision for tourism by disabled people; to establish a Council for Tourism for the Disabled; to ensure that the needs of disabled people are taken into account in the design of tourist accommodation and transport facilities and infrastructure; to amend the Development of Tourism Act 1969; and for connected purposes.
As the representative of Britain's major tourist resort, I am delighted that so many of my hon. Friends from lesser tourist resorts have decided to remain to listen to my presentation of the Bill. I feel rather like an ocean-going liner surrounded by a flotilla of tugboats.
Every year, millions of people in Britain cannot manage to have a holiday—sometimes because they cannot afford one or because they are too busy, but often because they suffer from a physical or sensory disability, which makes going on holiday, or even just being on holiday, too difficult. Finding accommodation that can cater for their special needs can be very hard, especially if, like many disabled people, they are poor or old.
Getting to a holiday resort can often cause severe problems for those who use public transport. British Rail's treatment of disabled passengers is often bad, and its recent decision to scrap direct InterCity services between London and Blackpool is evidence of its lack of concern for the thousands of disabled people who visit Britain's major tourist resort every year, many of them by rail.
Despite the many problems that are faced every year by disabled people on holiday in this country, there is now much greater recognition of both the problem and the opportunity in developing services to meet their needs. My Bill seeks to establish a framework within which private and public sector efforts to service those needs can be properly co-ordinated.
Some of my hon. Friends will know that, like the President of the Board of Trade, I am what might best be described as a pre-prandial interventionist. I believe that there are occasions when Governments should intervene before breakfast, before lunch and before tea. The development of tourism for the disabled is precisely such an occasion.
Much has already been done in this sphere. The English tourist board's "Tourism for All" campaign has helped to publicise the special needs of disabled tourists, and to encourage hotels and attractions to cater for them. Building regulations have brought improvements in the design of facilities for many types of disabled people. The national and regional tourist boards, together with organisations such as the Holiday Care Service, have begun to develop a system of information about accommodation, travel and entertainment facilities for disabled people. So good are some of the British initiatives that they have even been praised by the European Commission.
Despite these worthy initiatives, there is a long way to go. British tourism is still far from meeting the needs of the disabled, and it has not begun to seize the commercial opportunity in catering for them. There are 6·5 million disabled people in this country—one in seven of the population—with some form of physical or sensory

disability. In the whole of Europe, about 50 million people suffer from some disability. Apart from anything else, that is a significant commercial opportunity.
We must now build on what we have achieved and aim to turn Britain into a centre of excellence in the provision of tourism for the disabled. To do that, we need to co-ordinate action from both the public and private sectors. That is why the Bill calls for a little light intervention in the form of a Council for Tourism for the Disabled. Such a council would be able to develop further the "Tourism for All" campaign by promoting more extensively the commercial opportunities for businesses that can cater for disabled people.
The council would undertake a national disability audit of Britain's tourist facilities so that accurate and comprehensive information was available for people with every type of disability and special need, not just those who need wheelchair access.
Most importantly, the council would be responsible for the design of a national strategy for the development of tourism for the disabled. To create that strategy, the council would harness the resources of the private sector and of voluntary organisations, in much the same way as has already happened with initiatives such as the ADAPT scheme—Access for Disabled People to Arts Premises Today.
The council would work with Government Departments whose responsibilities have an impact on the disabled tourist. It would work not only with the Departments of National Heritage and Transport, but with the Departments of the Environment, Employment, Health and Social Security.
The council's aim would be to develop high standards, quality and choice. It would seek to ensure that the needs of every type of disabled person were fully taken into account in the design of everything from accommodation and transport to promotion material and even to railway timetables.
I cannot resist a little more intervention. If we are to encourage the private sector in England to participate in the development of tourism for the disabled on the scale that is necessary in the middle of a recession, the Government must allow for some grant aid or cheap loans for suitable projects.
In Scotland and Wales, grants for the development of tourism under section 4 of the Development of Tourism Act 1969 still apply. Businesses that want to upgrade their facilities to cater for disabled visitors do not have such a problem there. However, section 4 no longer applies in England. The Bill would remove that imbalance specifically and exclusively in the provision of tourism for the disabled by reintroducing an element of discretionary support for suitable projects in England.
The key to the development of tourism for the disabled must be a partnership, at both national and local levels. In Blackpool, we have a range of accommodation for people with various types of disability. Much of it is good, and the quality of service provided is first class. However, there is a great deal more that we can do.
I have set up a small working group of organisations and businesses to create a partnership that could help to bring about real improvements in the service that Blackpool offers disabled visitors. I am sure that. Blackpool's experience will serve, as it so often does, as a model for other, perhaps lesser, resorts. Equally, I hope


that a national Council for Tourism for the Disabled will create the kind of partnership that will greatly improve tourism for the disabled in Britain.

Question put and agreed to.

Bill ordered to be brought in by Mr. Harold Elletson, Mr. John Sykes, Mr. Nick Hawkins, Mr. Michael Fabricant, Mr. Michael Ancram, Mr. David Lidington, Mr. Edward Gamier, Mr. Keith Mans, Mr. Matthew Banks, Mr. Charles Hendry, Mr. Alfred Morris and Mrs. Teresa Gorman.

DEVELOPMENT OF TOURISM FOR THE DISABLED

Mr. Harold Elletson accordingly presented a Bill to encourage provision for tourism by disabled people; to establish a Council for Tourism for the Disabled; to ensure that the needs of disabled people are taken into account in the design of tourist accommodation and transport facilities and infrastructure; to amend the Development of Tourism Act 1969; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 11 December and to be printed. [Bill 89.]

Orders of the Day — European Communities

[Relevant documents: European Community Documents Nos. 6027/92, relating to outside staff and transfer of administrative appropriations from Part B to Part A of the Community Budget, 8286/92, relating to the fight against fraud against the Community Budget in 1991, the unnumbered Explanatory Memorandum submitted by H.M. Treasury on 13th March 1992, relating to discharge of the 1990 Community Budget and Court of Auditors' Special Report No. 2/92, relating to export refunds paid to selected major traders in the milk products sector; also the Memorandum submitted to the Foreign Affairs Committee by the Secretary of State for Foreign and Commonwealth Affairs on Prospects for the Edinburgh European Council.]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): On 2 July we debated the agenda for the British presidency, which I outlined to the House. I said that it was an ambitious programme containing six key elements: GATT; the completion of the single market; the future financing of the Community; enlargement; subsidiarity; and the Danish proposals on the Maastricht treaty. We have made progress on all those matters and we want to make that progress decisive when the European Council meets at Holyrood house on 11 and 12 December.
The Edinburgh meeting will have one of the heaviest agendas of any European Council in recent years. About one third of the Councils scheduled for our presidency will be held in the next four weeks. Foreign and Finance Ministers will meet this Friday, 27 November, and Foreign Ministers will hold a further conclave on 8 December. Meetings are not magic, but, alas, they are a condition of progress.
The past five months represent one of the most turbulent periods in the Community's history. We have experienced the general economic downturn across the world, the stormy French referendum, the volatility of the currency markets, the GATT dispute and instability in the east of our continent.
Out of the list of matters that I mentioned in July for our work programme, two massive achievements for Europe and for Britain are now emerging as reality—not yet secure but increasingly clear. I mean, of course, a GATT agreement and the completion of the single market. Both are the culmination of the work of several years.

Mr. David Shaw: My right hon. Friend will be aware that, in connection with the single market, 3,000 freight forwarders and customs clearance agents, many of them in my constituency, are likely to lose their jobs between 31 December and April next year. Can my right hon. Friend confirm that on the agenda for the Euro-summit in Edinburgh are measures advanced by the European Commission, which I hope will be supported by the British Government, to give assistance to members of the freight forwarding and customs clearance industry in Dover?

Mr. Hurd: There is a retraining programme, which was discussed yesterday by Finance Ministers. I shall ask my


right hon. Friend the Minister of State to give my hon. Friend further precise information about it. My hon. Friend is on to a good point about something which is, indeed, part of the programme.
I was talking about the two massive achievements now coming into sight—the GATT agreement and the completion of the single market. If we can bring them to reality they will substantially contradict the theory, which one now reads all the time, that the age of reasoned co-operation is gone and that Europe and the world are sinking into inevitable disorder and slump. If the GATT agreement or the completion of the single market were to fail, we would be closer to a dark age.
The Munich Group of Seven summit and the Birmingham European Council both called for the GATT agreement to be concluded by the end of the year. We are nearer to that goal than those who set it probably expected at the time. The House knows of the agreement on 20 November by the European Commission negotiators and their American counterparts on a range of outstanding differences. The Commission gave its unanimous backing to the agreement last Friday.
My right hon. Friend the President of the Board of Trade made a statement about the agreement to the House yesterday, so I need not go into detail, but the way is now clear for negotiations to resume in Geneva among all parties to the GATT. Senior negotiators are meeting there today and tomorrow to fix the timetable for completing that work. I do not think that a final settlement will he ready by the time of the Edinburgh Council, but I am sure that the Heads of Government will welcome the progress that has been made towards the aim that they set in Birmingham of reaching a settlement this year.
The agreement is clearly in the interests of both Europe and America. We have not been asked to make some artificial choice between Europe and the Atlantic. With our encouragement, during our presidency the Commission has negotiated on behalf of Europe. The relationship with the United States is of critical importance to the Community, as they have guaranteed our security for half a century and their presence in Europe remains vital. However, Europe must define itself on its merits and not by excluding our American allies. That is why one of the most important events in our presidency will be the EC-US summit in the second half of December, at which my right hon. Friend the Prime Minister will represent the Community.
The second great achievement on the way is the biggest free trade project in history—the single market. It is much more ambitious than the creation of a conventional free trade area, with about 300 pieces of common legislation to replace thousands of national regulations and with common competition rules to govern the market. It will expand opportunities for British business and British consumers and should mean lower prices, increased efficiency and the end of routine border controls for goods.
Inherent in the single market is a large extension of freedom for our citizens. For example, 11,000 British students are studying under the European Community action scheme for the mobility of university students—the ERASMUS programme—in other Community countries. During coming years there will be a steady fall in air fares, which will make travel cheaper and easier. That is what we sometimes call the "citizens' Europe".
Those are the detailed measures which will make sense of the Community in the eyes of practical people. We must

ensure that business and citizens know about, and take advantage of, the many benefits and opportunities that the single market will create.

Mr. Dafydd Wigley: Does the Secretary of State accept that what ordinary citizens are looking for most is to find work in a Europe where unemployment is increasing? In view of the trend during the past few months for the public sector borrowing requirement to increase in Britain, and the fact that Mr. Delors said that a massively reflationary kick-start package might be put forward, does the right hon. Gentleman accept that it might be increasingly difficult for us to meet the long-term aim of the Maastricht treaty, which is that there should be a 3 per cent. limit on the amount of gross domestic product allowed to go to the PSBR?

Mr. Hurd: I do not agree, but, before I close, I shall come to yesterday's discussions on the issue that the hon. Gentleman mentioned.
The completion of the single market has been central to our presidency. We were in the forefront of those who designed the project and we intend to bring it to fruition. Political agreement has been reached on a series of directives to do that: on value added tax, and excise duties; on life insurance; on pharmaceuticals; and we shall be looking for agreements on Community trade marks, and on animal and plant health, which are the last agreements necessary.
Completing the single market is not an exact science. Some of the measures in the original White Paper by Lord Cockfield are now given a lower priority, while others that were not in the White Paper have been carried through. We have not seen the end of the liberalising of areas such as telecommunications and parts of the energy market, but we believe that it will be possible to declare at the Edinburgh Council the single market open for business on time at the end of the year.

Sir Nicholas Fairbairn: Does my right hon. Friend believe that we have simplified all of those matters? Can he explain why the papers for today's debate, which is only a "take note" motion, weigh 4·6 kg?

Mr. Dennis Skinner: What is that in pounds?

Sir Nicholas Fairbairn: I was translating for the benefit of the Europeans.
Is my right hon. Friend further aware that, having read them, I do not believe there is a lawyer in the House, far less a human being in Europe, who understands them? if he seriously thinks that this is all about a love-in between people, may I ask him to say what France is about?

Mr. Hurd: The weight of paper derives from the demands of the House to have a proper care for what is going on. What we are dealing with, and what my right hon. Friend will deal with in detail when replying to the debate, is the future financing of the Community, all aspects of its expenditure and the budget for next year, and I accept that such matters in any organisation give rise to weighty documents. I am delighted that my hon. and learned Friend has mastered them and I hope that he will tell us about them later. I assure him that the weight of documents derives from the enthusiasm of the House to keep an eye on what Ministers do in the Council of Ministers, in particular in deciding how much of our money the Community should spend.
I was dealing with the single market. We have been talking about the virtual completion of the legislative phase, but we go on to the phase of compliance, enforcement and access for redress for those who run into difficulties in exercising their rights.

Dame Elaine Kellett-Bowman: rose—

Mr. Hurd: I will give way to my hon. Friend and then I really must make progress.

Dame Elaine Kellett-Bowman: Is my right hon. Friend aware of the rumour that in future we shall take almost as relaxed a view as is taken by our southern counterparts towards the implementation of regulations and directives?

Mr. Hurd: I am aware of the rumour to which my hon. Friend refers, but I am certainly not in favour of the relaxed implementation of rules. When rules are agreed —they need not of themselves be greatly detailed—they should be implemented. That is one reason why—

Mr. Nicholas Budgen: rose—

Mr. Hurd: I said that I would try to make progress. As I was saying, that is one reason why the CBI recently emphasised the importance of ratifying the treaty of Maastricht.

Mr. Budgen: rose—

Mr. Hurd: I have given way several times. I promise to give way to my hon. Friend later.
The treaty will, for the first time, equip the European Court of Justice with the teeth needed to ensure that member states live up to the obligations that they assume. That element is fundamental in establishing the level playing field in Europe which every British company says that it wants.

Mr. Budgen: Is my right hon. Friend aware that there was an authoritative leak in The Times—[Interruption.] —or it may have been in The Daily Telegraph, to the effect that a Minister had stated that it would be the policy in future of the British Government to take a southern European attitude towards the implementation of law? That sort of behaviour would be likely to spin off into a disregard of British law as well.

Mr. Hurd: I always thought that my hon. Friend was an opponent and critic of bureaucracy. What we are aiming at, in relation to what he quoted, are cases where officials in Whitehall take decisions made in Brussels and carry them through in excessive detail. That is known in the jargon as Bookerism, after the journalist who identified that ill. Christopher Booker is strongly against the European Community, but, being an honest journalist, he has spotted that much of the regulation is derived not from the Community but from the itch of Whitehall to insert its own bureaucratic instincts into the process. I am grateful to my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) for enabling me to make the point clear.

Several Hon. Members: rose—

Mr. Hurd: I really must get on, because many hon. Members wish to speak.

Dr. John Cunningham: rose—

Mr. Hurd: This must be the hon. Gentleman's speech.

Dr. Cunningham: I have heard of the seven-year itch —as the right hon. Gentleman is referring to the itch in Whitehall—but this is a 14-year itch. The Conservatives have been in office for 14 years. Have they suddenly discovered that the problem exists in Whitehall?

Mr. Hurd: If, in the fulness of time, the hon. Gentleman assumes office, he will know that the itch is permanent —that there is always an instinct among energetic and ambitious officials to push regulation and control that extra inch. It is an itch which Labour Members have constantly encouraged, which is one reason why they are always rejected by the British people.
I have referred to the two big achievements that are on the way. The third issue is the future financing of the Community. A review in that context would have been necessary, with or without Maastricht, and the Paymaster General will say more about that when he replies to the debate. I wish to comment on the review of financing.
The Community budget amounts to about £45 billion, which is about 2·2 per cent. of general government spending in the Community. Britain is the second largest net contributor after Germany. We are expected to make a net contribution of about £1·7 billion, after our rebate, in the present calendar year. France is also a net contributor, with Italy now broadly in balance.
We have made some progress in the negotiations since the Commission first tabled its proposals in February. Our aim is to reach a settlement at Edinburgh, though that will not be easy. Several member states have, unsurprisingly, sought to challenge the United Kingdom abatement. We have made it clear to our partners—firmly, though I hope quietly—that we shall not accept any adverse change to it. My right hon. Friend the Chancellor did that again yesterday and on the radio this morning.
Maintaining our abatement remains an overriding objective. It is a manifesto pledge. It can be altered only by unanimity, and if others persist in challenging aspects of it, there will not be an agreement. The House may recall how ambitious—

Mr. George Robertson: rose—

Mr. Hurd: I hope the hon. Gentleman will forgive me for not giving way. I really must get on.

Mr. Robertson: I have a most important point to raise with the right hon. Gentleman.

Mr. Hurd: Very well, and then I shall have to make progress.

Mr. Robertson: In the light of what the right hon. Gentleman said in absolute terms in relation to the British abatement—this is an extremely serious matter—may I remind him that what the Chancellor of the Exchequer said on the Radio 4 "Today" programme was not what the Foreign Secretary just said? The Chancellor said that "no serious or significant" change in the British abatement would be acceptable. That is not what the Foreign Secretary said. Is the British abatement negotiable, or is it not?

Mr. Hurd: The hon. Gentleman should not be reduced to such pettifogging. There was a technical change in 1988 which did not affect adversely the United Kingdom rebate.
If the way in which the Community spends or raises its money is altered, there may be technical changes. But we are against and will resist any adverse impact an our abatement.
The House will recall how ambitious were the Commission's proposals for increasing the size of the Community budget. The original Delors 2 package envisaged a real-terms increase in Community spending of about £7·5 billion in 1997, over and above the level implied by the present ceiling. Some people presented that as the inevitable bill for Maastricht, but Maastricht also emphasised the principle of sound public financing. That means the Community cutting its coat according to its cloth, which means setting priorities.
We have seen some evidence of that as the proportion of the budget devoted to agriculture has been squeezed, from about 80 per cent. in the 1970s to 58 per cent. now. But there is much more to do. We have made it clear to the Commission, as the Prime Minister told the House, that its proposals are excessive and that we cannot support them. In present economic circumstances, when many member states are suffering from recession or are undertaking painful retrenchment, we cannot be expected to agree a package which implies a rate of real growth in Community spending way above what is planned domestically.
There was a time when that point of view, which is familiar to the House, was not familiar to the Community; it was regarded as something rather puritanical hatched in the British Treasury. But now there is a concerted view among not all, but most, member states and, in response to that, the Commission has scaled down its proposals. Some member states now see them as too niggardly, but we and others believe that they are still in excess of what the Community can afford. We are looking for a further substantial reduction in the Commission's figures for increasing own resources.
Enlargement was the fourth of the six subjects that I mentioned, so I am about halfway through.
Preparations for negotiations with Austria, Sweden and Finland have gone ahead. Switzerland has submitted its application and the Norwegian Prime Minister, Mrs. Brundtland, will be in London tomorrow to present Norway's application for full membership to my right hon. Friend the President of the Council. At Edinburgh we will submit a report on the completion of those preparations for enlargement within the Community. We need to decide at Edinburgh—there is a background to this on which I gave evidence to the Select Committee yesterday— when negotiations on enlargement, either formal or informal, can start. Our view is clear; we must maintain the impetus that we have helped to create.
The countries of central and eastern Europe are going through a period of enormous change and dislocation. One reason why I am so keen on trying to get progress on these Community matters at Edinburgh is that we really must have more time and energy in 1993 to analyse and act on the problems in the eastern half of our continent, including Russia, where the stakes are now formidably high. I do not think that the House, this country, the Community or the world is paying enough attention to what is going on and what the stakes are in Russia and, therefore, in the rest of the former Soviet Union and the rest of eastern Europe.
As regards the Visegrad 3—Hungary, Poland and Czechoslovakia—we have made good progress during the presidency. We hope to welcome them to full membership

around the turn of the century, but meanwhile we are setting the pace. A meeting between the Community and those three countries was held at Foreign Minister level in October and the Prime Minister held a summit meeting with them in London on 28 October. The Commission will report at Edinburgh on strengthening co-operation with Hungary, Poland and Czechoslovakia. We also plan to sign association agreements between the Community and Romania during December.
Certainly we need to be pragmatic, but we need to be generous, in particular in giving those countries of eastern and central Europe access to the Community market. Together and individually as member states, we are providing aid. Although I know the difficulties in special cases, such as steel, I believe that our policy must be to help them trade their way to prosperity.

Sir Russell Johnston: The right hon. Gentleman anticipated my question. Does he agree that the Visegrad countries have every reason to complain that, while there has been a lot of generous talk about them, access for their goods, particularly agricultural goods, has been rather cheeseparing?

Mr. Hurd: I agree with the hon. Gentleman that it is a bit negative. I have said this before: we will press for further access, but a beginning has been made. The association agreements are a beginning and the trading parts of those agreements are already in place. The hon. Gentleman and I agree on the substance of the matter.
My next points are subsidiarity and openness. By the end of this year, 10 member states expect to have ratified the Maastricht treaty. The House will shortly be invited, in the light of our recent debate, to start the Committee stage of the Bill. The process of ratification has acted as a lightning conductor for general public concerns about the pace of European integration and the centralising tendencies of the Brussels machine. Those anxieties have to be listened to—as they have been—and addressed.
The Birmingham summit took note of the concern. The Birmingham declaration emphasised, in a way that it would not have done a couple of years earlier, the importance of national identity and the need for those who argue for Community action in specific instances to show why an objective cannot be achieved satisfactorily at the national level. The burden of proof will be shifted and no longer will Community action be seen as an end in itself, as it often has been over the past 35 years.
I hope that hon. Members who are interested in the issue will study the Commission paper on subsidiarity and the procedures that it will use to weed out proposals that fail the tests in article 3b of the treaty.
The Commission has already reduced its legislative proposals this year from the planned 118 to about 50—compared with about 150 in each of the last two years. That is partly because of progress with the single market, but partly because of the change that is taking place in the way in which the Community is operating. The Commission's paper, which I have mentioned, sums it up as follows:
A first consequence of the subsidiarity principle is that national powers are the rule and the Community's the exception.
That is the analysis of the European Commission.
It is quite contrary to the nightmares to which the right hon. Member for Bethnal Green and Stepney (Mr. Shore) so passionately adheres, but he had some right on his side


and there are still people who would not agree at all with what the Commission is saying there. There are still people who believe that Community action is a virtuous thing in itself, but they are on the defensive, as these papers show.
We look forward to decisions at Edinburgh on procedures and criteria for applying the subsidiarity test. I believe that, once adopted and reinforced by the legal underpinning of the treaty, that will radically change the way in which the Community operates. That radical change is what the Select Committee clearly felt was necessary. At Edinburgh, the Commission will also bring forward examples of the sort of legislation that should be knocked off the statute book: rules that should never have seen the light of day.
We have not yet completed it, but we are trying to create a political fact—a change in the way in which the Community operates, in advance of the legal obligations under the treaty. I believe that those who still see Britain as beleaguered in resisting an inexorable movement towards a super-state are mistaken about the way the tide is flowing.
I listened to Chancellor Kohl talking to students in Oxford a fortnight ago. He said about the treaty:
We have not laid the founding stone for a European Super-State which reduces everything to the same level and blurs the differences. Rather we have committed ourselves to a Europe constructed on the principle of 'unity in diversity'. We must do everything we can in future to shape European policy in such a way that people can identify with it more easily. They must see that it is concerned with their interests and not with a technocratic Europe, far removed from the people.
Those are the words of the German Chancellor, which I think that every hon. Member would happily echo.

Mr. Alex Salmond: rose—

Mr. Hurd: I think that I know what the hon. Gentleman is going to ask, but let him ask it anyway.

Mr. Salmond: I am very glad; I wish that I knew how the Foreign Secretary will reply. Let me ask the question. Is the Foreign Secretary going to say nothing whatsoever about the application of the principle of subsidiarity in the state of the United Kingdom?

Mr. Hurd: I will say two things. The Birmingham declaration makes it clear that that is a matter for member states and, with regard to the policy of the Government, we are leaping over the kind of old-fashioned plans that the hon. Member and his party have. We are seeking to bring the decisions closer to the people in the way in which hospitals, schools and other institutions are run—much closer than anything that the old-fashioned nationalist parties ever had in mind.

Several Hon. Members: rose—

Mr. Hurd: No, I must get on. I have created a hubbub, but I do not wish to continue with it.

Sir Peter Tapsell: rose—

Mr. Hurd: I will give way to my hon. Friend a little later.

Sir Peter Tapsell: It is on subsidiarity.

Mr. Hurd: Very well.

Sir Peter Tapsell: My right hon. Friend, in his very persuasive way, has just summarised a much more attractive concept of subsidiarity, which, if it could be embodied in the treaty, would relieve a lot of anxieties. Since we are told that the treaty cannot be amended, how will his new concept and definition of subsidiarity be able to replace article 3b in a justiciable and enforceable form?

Mr. Hurd: It is written in article 3b. What I have said simply illustrates how 3b will work in the future and how we are trying to create it now as a daily fact in the life of the Community, even before the article is a legal obligation on anybody. The three paragraphs of 3b encapsulate what I have been saying. I have been describing what we are trying to achieve now in the work of the Commission, the Council and eventually the Parliament.
In Birmingham, the Foreign Ministers were asked to find ways of opening up the Community's work to greater scrutiny. I sometimes feel like a nutcracker at work on a particularly stubborn nut. We want to make the Community's operations more comprehensible and national Governments more accountable to their Parliaments. That involves greater openness on issues such as voting records or letting cameras into important guidance debates on major proposals. It is not proving easy to get agreement among the more buttoned-up members of the Community on that matter. However, the latest news is slightly more encouraging and I expect a solid start to be made on the question of openness in Edinburgh.

Mr. Geoffrey Hoon: Will the Secretary of State give way?

Mr. Hurd: No. I am sorry, but I must proceed with my speech because my voice is giving way and other hon. Members want to speak.
The Birmingham declaration also committed member states to make a bigger effort at explaining how the Community works and its relevance. My hon. Friend the Member for Wolverhampton, South-West enabled me to deal with the question of excessive bureaucratic zeal in Whitehall and I need not repeat the point that I made in answer to him. The press often pillory the Community for half-baked and stupid ideas—they are sometimes right, but they are often wrong. That is why we have circulated a paper to hon. Members on "Euromyths"—there is a big demand for that paper—and published a guide to British membership of the Community and the implications of the treaty. In just over a fortnight, we have dispatched 239,000 copies of the booklet and a reprint has been ordered, so hon. Members should place their orders now.
The final main point of the original work agenda is the question of Denmark and ratification. We now have the proposals put forward by the Danish Government, backed by seven of the eight parties in the Folketing—the basis on which the Danes could, in the view of those parties, put the treaty, suitably clarified and amplified, to a second referendum.
The Danes put a lot of weight on some of the points that I have mentioned, including subsidiarity and openness. They want a position on European monetary union broadly analagous to that which my right hon. Friends the Prime Minister and the Chancellor obtained for this country. Their concerns focus on stage 3, citizenship, defence, and the interior and justice pillar. The Danish Foreign Minister has just completed a tour of


capitals explaining his requirements. I spoke to him on Sunday evening, and we shall remain in close touch with him and our other partners.
It is clear that no other member state will accept the reopening of the treaty, and the Danes do not seek a renegotiation. It falls to us as President of the Community to find an arrangement acceptable to all member states, taking account of the stated Danish requirement for a legally binding outcome. We are working on that—we are drafting and discussing it—but it is too soon to speculate on the precise nature of the answer. We shall have a special meeting of Foreign Ministers to discuss it on 8 December. We are all committed to achieving a solution, which is essential if the treaty is to come into effect. We are condemned to succeed in solving the problem if there is to be a ratified treaty, and I hope that we shall reach agreement on that in Edinburgh.
An hon. Member has already asked about the economic position in the member states of the Community. Concern is growing in most, if not all, member states about the weakness of economic activity. In the past six months, activity has turned out weaker than we or others expected. Business and consumer confidence have diminished, unemployment has risen and, at the same time, inflation has fallen. Overall in the Community, economic growth this year is unlikely to be above 1 per cent., and next year is likely to see a similar picture. That is a substantial change from the outlook only a few months ago, when an early return to normal rates of growth were widely expected. Growth prospects in the United States and Japan are modest.
Against that background, the British presidency, and particularly my right hon. Friend the Prime Minister, believe that it is vital to have a full discussion of economic developments at the Edinburgh Council. We have already responded to those challenges, particularly in the autumn statement, with measures that will boost confidence, promote recovery and protect capital spending in the context of a framework of low inflation and prudent finance.

Mr. Tam Dalyell: During those economic discussions, especially as they will take place in Scotland, can there be some serious discussion among Heads of Government on the future of the nuclear programme, because many of us are extremely worried about the Dounreay decision, which will last for some 30 or 50 years? As we have been the leaders in all that, is it really wise to call a halt to remarkable British developments? Can that matter be on the agenda?

Mr. Hurd: I cannot promise that, but I shall ensure that the hon. Gentleman's point is passed on.
I was referring to the autumn statement. We need to consider now what action member states should take, both individually and at Community level, to hasten recovery and strengthen growth. Those measures include opening markets—I have already mentioned the GATT round and the single market—giving priority to capital spending in national budgets, rigorously controlling wage costs in the public sector and improving the supply side of our economies. At Community level, there should be a role for the European investment bank to provide more loans and guarantees to support investment spending, especially on

projects such as the trans-European network. There will be a discussion in Edinburgh, which is the basis on which we believe that it can best take place.

Mr. Anthony Steen: My right hon. Friend mentioned 1 per cent. growth across Europe and the rumour that we would take a more relaxed view towards implementing regulations. Does he agree that, if we do not take a relaxed view towards implementing regulations and curb the rigorous approach of the civil service, which has helped to destroy many small firms in this country by pursuing rules and regulations far beyond how they were originally devised, many small firms will get into even more problems? I should like to hear how the enthusiasm of officials, whether in Europe or in this country, could be curbed.

Mr. Hurd: I agree with my hon. Friend. When rules, for example on the single market—many rules are designed and encouraged by British firms—are agreed, they must be honoured. That must be right and the strengthening, enforcement and penalties for neglect are contained in the treaty. A fine example of our concern is where Whitehall adds its "extra". Many of the complaints, which are often attributed by people in local papers to the European Community, are a result of that Whitehall and town hall extra. My hon. Friend is right, and the Prime Minister touched on the matter in a speech in Brighton in October. My right hon. Friend the President of the Board of Trade intends to ensure that this country does not add that Whitehall or town hall extra to agreed rules.
There has been recent criticism from the Community, echoed by the Opposition, about the British presidency. I hope that, if the hon. Member for Copeland (Dr. Cunningham) has time to alter his speech before he makes it, will be careful about that. The wildest remarks, which he may be about to quote, came from people in Paris, who, understandably, were in political difficulty about the GATT agreement in the past few days, even though the Commission and not the presidency was negotiating on behalf of Britain. We should make allowances for such remarks, even though they were well off target.
A more consistent line of criticism of the presidency is aimed at the relatively slow process of taking the Maastricht legislation through the House. The Opposition know all about that, and they are the last people entitled to criticise us about it. Those who have taken the trouble to study the realities of parliamentary life in this country now have a good understanding of the position. They know, as the hon. Member for Copeland will have learnt from the Germans when they came, that we have settled on a course on which we are likely to be successful.
I have spoken of the massive achievements now emerging as a result of the GATT negotiations and the coming completion of the single market. The other problems at Edinburgh are formidable—they sometimes seem more so because they are linked. I think that the linkage gives us grounds for hope. The Community and the world are passing through a time of exceptional turbulence. Most of the main trading countries suffer from stagnation or recession. In many of them, there is distrust, not just of the Government in power, but of the political system and structure. We see that in Europe and beyond. The Labour party is one of the few opposition parties not to have benefited from that feeling, for reasons that need not detain us today.
In order to extricate ourselves from those difficulties —which people can now see more clearly and about which they are more concerned—we need two things. We need an effort of will and an effort of persuasiveness—one without the other will not do. I do not pretend that in Edinburgh we shall solve, in detail, all the problems that I have mentioned, but I hope that we can show, between now and the end of the year, a determination in Europe to pass from argument—which is not a bad thing—to coherent action by the Community in the direction for which we in Britain have long argued and which Europe clearly needs.
I beg to move,
That this House takes note of the White Paper on developments in the European Community, January to June 1992 (Cm. 2065), European Community Documents Nos. 9649/92, relating to the principle of subsidiarity, 4829/92 and 5201/92, relating to Commission proposals for the finances of the Community to 1997, 5202/92, relating to the system of Own Resources, 5203/92, relating to renewal of the Inter-Institutional Agreement on budgetary discipline and improvement of the budgetary procedure. SEC (92) 1412, relating to the United Kingdom abatement, 8567/92, relating to establishment of a Cohesion Fund, COM (92) 140, relating to the Preliminary Draft Budget of the European Communities for 1993, 7933/92, relating to Letter of Amendment No. 1 to the Preliminary Draft Budget, 8209/92, relating to the Draft Budget, 9901/92 and the proposals described in the unnumbered Explanatory Memorandum submitted by H.M. Treasury on 19th November, relating to the European Parliament's proposed amendments and modifications to the Draft Budget, 6569/92, relating to the Court of Auditors' Opinion No. 2/92, the Annual Report of the Court of Auditors for 1990, the negotiating approach adopted by Her Majesty's Government in the run-up to the Edinburgh European Council on 11th to 12th December and the Government's continuing efforts to secure budgetary discipline and value for money from Community spending.

Dr. John Cunningham: 1 beg to move, to leave out from '1990' to the end of the Question, and to add instead thereof:
'but regrets that the British Presidency of the European Community, which has almost ended, has achieved so little for Britain and for the Community; deplores the fact that the Government has persistently refused to put growth and employment at the top of the EC agenda, has damaged the United Kingdom's standing by its inept handling of the British currency crisis, has produced no clear way forward on the Community's future financing, has made little real effort to solve the Danish problem, has produced confusion on its own ratification timetable, and has shown insufficient resolution on the problems of former Yugoslavia especially in regard to rising numbers of refugees and in enforcing United Nations mandatory sanctions; believes as a consequence that Britain's influence and authority in the European Community has been markedly reduced; and calls for a new direction to be taken by Her Majesty's Government in order that Europe's crucial problems are properly addressed at the Edinburgh European Council.'.
I am glad that the Foreign Secretary remembered to move the motion, or I would not have been able to move the amendment.
As I listened to most of the speech of the Foreign Secretary, I thought that, with his great experience and aplomb, he was going to skate over most of the more serious events in the European Community of the past few months, without acknowledging any problem or any issue that had caused trouble. Until the last few moments of the right hon. Gentleman's speech, it seemed as though all was for the best in the best of all possible worlds, and we were

moving, unanimously and with great support across the Community, to the Edinburgh summit. As the right hon. Gentleman well knows, the reality in Europe is not like that.
To be kind, the British presidency has been an almost unmitigated disaster—many people have said much worse things about it than that. It was launched with a great fanfare, and was an excellent opportunity for Britain and Europe. The developments on enlargement may well mean that this is the last opportunity this century for Britain to hold the presidency. By the time our turn comes again, it is likely to be a different Community, in both membership and nature.
Without being unduly critical of the right hon. Gentleman, I feel that the opportunity has been largely wasted by Her Majesty's Government. Our presidency has certainly done nothing to enhance Britain's reputation in Europe during the past six months. I shall quote what the Prime Minister said of his hopes for Europe and the British presidency:
Our membership of the European Community is about peace, stability, investment, jobs and prosperity.
Those were among the Prime Minister's objectives on assuming the British presidency, and few, if any, would disagree with him.
Sir Christopher Prout, leader of the Conservative group in the European Parliament, was even more optimistic about the British presidency. In The House Magazine on 29 June this year, he said:
I suspect that future historians will see it as a happy stroke of fortune that Britain was called upon to guide the Community through the choppy waters of ratification for Maastricht.
He was rather wide of the mark, but continued:
Might not the British acquire, over the next six months of their Presidency, a taste for running Europe, rather than simply running it down'?
I fear that Sir Christopher has been sadly disappointed in his hopes for the British presidency, as the reality has turned out to be something different.
As the Foreign Secretary properly said, the British presidency also had the following aims for progress: development of the ratification of the Maastricht treaty; a solution to the Danish problem and subsidiarity; enlargement of the Community; strengthened links with the new democracies in central and eastern Europe; an end to the suffering in the former Yugoslavia—sadly and regrettably. the right hon. Gentleman did not even mention that in his speech today—and a successful conclusion to the GATT talks.
The 10 objectives set out by the Government were peace, stability, investment, jobs and prosperity, and those that I have just listed. How have the Government fared? How did they measure up to their own stated objectives? Very badly. As publishing league tables of results is in vogue at present, I shall ask where the Government come in the league table of their own tests.
The first test is that of stability. Economic stability has gone down the drain during the period of the British presidency of the European Community. We have seen devaluation, and we have come out of the exchange rate mechanism. Investment has, sadly, reduced during the period of the British presidency. Unemployment has risen dramatically: 51 per cent. of the rise in unemployment in Europe, to August 1992, occurred in Britain. Can anyone say that prosperity has improved during the British presidency?
The right hon. Gentleman seemed sanguine about subsidiarity, but the position is remarkably confused. There is apparently some agreement in the House about enlargement, which has been stalled as the right hon. Gentleman and the Prime Minister accepted in Lisbon that enlargement should not proceed until the Maastricht process and the Delors 2 package had finally been agreed among the Twelve. A continuing and appalling tragedy is unfolding in the former Yugoslavia, and very little progress has been made on establishing better links with central and eastern European democracies.
Significant progress has been made in the GAIT talks, which I acknowledge and to which I pay tribute. I welcome the successful outcome, which was important and which —I agree with the Foreign Secretary—goes far beyond the boundaries of the European Community and the United States of America. The final accord still needs to be sealed, but it is essential that it is sealed, not just for the rich and prosperous countries of the west but for the many poor countries in the developing world, for whose continued existennce a GATT agreement is so important. On a test against the benchmarks set down by the presidency, I give the Foreign Secretary a score of one out of 10.

Mr. Gyles Brandreth: The hon. Gentleman anticipated my intervention. Who would he rather was in the presidency? Would it have been France? If it had been France, would we have had what happened last week? The hon. Gentleman is absolutely right: this has been about leadership. Prosperity is about GATT. and GATT has been delivered, thanks to the leadership offered by my right hon. Friends the Foreign Secretary and the Prime Minister. If it had not been for them, we would not have had it.

Dr. Cunningham: The obvious answer to the hon. Gentleman's intervention is that I would rather have seen a British Labour Government holding the presidency. Failing that, I would rather have seen this British Government making a better success of the presidency in the interests of Britain and the Community.
The British presidency has been variously described as a fiasco and the worst that many of our European partners can recall; more objective observers have called it a disaster. In the debate on 2 July, the Foreign Secretary likened his task to pushing stones uphill. Obviously, many of them have rolled back down on top of him in the last few months and squashed him, and his aims and objectives, flat.
Most of Britain's European partners will be delighted when the British presidency ends. I suspect that the Foreign Secretary will secretly share their pleasure and relief. He will probably have a quiet drink on 31 December, not just to herald 1993 but to see the back of the burdens which he has been carrying—badly, unfortunately. That has not been all his own fault, because the Prime Minister and the Chancellor of the Exchequer are far more culpable.

Mr. Stephen Milligan: Speaking in the House two weeks ago, the hon. Gentleman made a point about lack of leadership. Would it not have immensely strengthened the British presidency, Britain's credibility in Europe and our support for the Maastricht treaty if the Opposition had been true to their principles and supported the Government on the ratification of the treaty?

Dr. Cunningham: That is a spurious intervention, on two counts. First, we made it clear from the outset that there was no Labour principle in supporting a treaty which contained opt-outs that we could not support. So the idea that we had principled support for the treaty is completely misreading the facts.
Secondly, as we have rehearsed many times, and as we learned the day after that debate, it was not about the ratification process. We learned that the hon. Member for Great Yarmouth (Mr. Carttiss) went into the Lobby to support the Government at the last moment only because he was told that the Third Reading would not be until after the second Danish referendum.
We saw the leader of the Liberal party conned into the Lobby in support of a discredited Prime Minister, in the belief that somehow the vote was about the principle and about accelerated consideration of Maastricht. We know that that was not so. Since the Bill is returning to the House at the earliest next week, we know that the great difference between our amendment and the Government was a matter of 14 days—two weeks. Does anyone really believe that it was worth it for that minute difference? So no principles were betrayed; we stood by our position then, and we stand by it now.
Curiously, the Government have obstinately refused to put economic recovery in Europe among their priorities for their presidency or even on the agenda for the summit. They were asked to put it on the agenda for the emergency summit in Birmingham, and they declined. They have been pressed again to do so, and I hope that the matter is finally on the agenda for Edinburgh, but there is doubt and confusion even about that.
It is all very well talking about more freedom to fly in the European Community, and about cheaper air fares. That is all over the heads—literally as well as practically —of the 16 million people in Europe who do not have a job, let alone an airline ticket. It is an updated, high-tech version of the advice of the Foreign Secretary's former colleague—former friend, I almost said, but that may be more accurate than might be believed—Lord Tebbit, when he told people to get on their bikes. Now they have to get on their aeroplane, but they would like jobs and some income before they can be persuaded that cheaper air travel in Europe is a great benefit for them and their families.

Mrs. Edwina Currie: I should like to understand the hon. Gentleman clearly, as a large number of my constituents work at East Midlands airport. Is he saying that it is now Labour party policy not to have any interest in cheap air fares? Does he realise that, if more people fly, as is bound to be the case if air fares come down, more people will have jobs working in that industry?

Dr. Cunningham: I am not saying that at all. I give the hon. Lady full marks for ingenuity in her intervention, but, as she knows, that is not what I said, and that is not the implication that she or her constituents should draw from my remarks. I do not want any misrepresentation on that point in the local press in Derbyshire in the next few days.
For five months of the British presidency, there has been no action on economic recovery in Europe, in spite of support from the Commission. Yesterday, there was a briefing at 10 Downing street at which journalists were told that that was the big new issue; an autumn statement


for Europe, no less, was the objective of the Prime Minister and the Chancellor of the Exchequer. It was big news. The BBC fell for it, with 10 minutes on the 9 o'clock news last night devoted to it.
Today, within 24 hours, the Chancellor of the Exchequer was pouring cold water all over the proposed new spending package. Again the result is confusion in Europe, not least because there is confusion in Britain too. If 10 Downing street and 11 Downing street cannot get agreement on what the supposed package is about, no one should be surprised if our colleagues in the European Community are not only confused but dismayed yet again.

Mr. Giles Radice: Is it also the case that the President of the European Commission suggested to the British presidency that it might care to put the issue of jobs on the agenda of the Birmingham summit, but that the British presidency did not want it there?

Dr. Cunningham: My hon. Friend is absolutely right. I regret the abdication of responsibility by the British presidency on that matter.

Mr. Hurd: The hon. Gentleman has said that twice. It does not become any truer because he is supported by his hon. Friend. There was a discussion at Birmingham, and there were conclusions at Birmingham. There will be a discussion at Edinburgh.

Dr. Cunningham: It is funny that there was no mention of it in the declaration from Birmingham, and that no action has ensued.
We firmly believe that there should be Europewide measures on employment, job creation, investment in transport and infrastructure, and measures for industrial regeneration and investment too.
In contrast, the British presidency proposes a reduction of 13 per cent. to 15 per cent. in the research and development budget for the European Community in the coming year. How will that help economic regeneration in Europe, in addition to the point made by my hon. Friend the Member for Linlithgow (Mr. Dalyell) about fast reactor research and development?
The repeated proposals, in speeches and questions, of my right hon. and learned Friend the Leader of the Opposition and my hon. Friend the Member for Dunfermline, East (Mr. Brown) are well documented, but they have been ignored again and again. To come back to the point of a previous intervention, there has been a complete absence of leadership by the British presidency on the issue.
The humiliating and total collapse of the Government's policies which led to our withdrawal from the exchange rate mechanism has caused immense harm to our economic and political interests, and it has put us on the sidelines in Europe. The British presidency has done nothing to reverse that. Whatever the Government say, the plain truth is that the ignominious events surrounding black Wednesday were caused primarily by the deplorable weakness of our economy after 13 years of this Government.
In Britain there has been no partnership between Government and industry, as there is in France. There has been no partnership for training between Government and employers and unions, as there is in Germany. There has

been no sense of the balance between economic and social policies, as is common throughout the entire Community, with the one disgraceful exception of the United Kingdom. The Government simply have not learnt from their experiences in dealing and working with our European partners; otherwise, they would not have been moved to exclude the social chapter from Britain's version of the treaty in the first place.

Mr. Ian Taylor: Does the right hon. Gentleman —[Interruption.]—well, honourable perhaps: he may have hopes for the future, but not if he carries on like this. He has forgotten that, for many months in the early part of the presidency, the British Government, under the Chancellor of the Exchequer, were trying to persuade a coherent force to work throughout the Community to reduce interest rates, and that that was blocked particularly as a result of the problems that the Germans were having with their reunification. The hon. Gentleman knows, as any economist knows, that, until monetary policy is relaxed, it is difficult to obtain any recovery, and that was the problem which ultimately had to be solved by black Wednesday.

Dr. Cunningham: I do not accept that as a reading of recent contemporary political history in Britain. The Government's stated policy again and again was that the cornerstone of their economic policy was high interest rates and membership of the exchange rate mechanism. That was what the Government said would resolve our problems, but everything collapsed around their ears. That is the only reason that we are in our present situation. It is all very well to blame others in the EC, but there is no escape from responsibility for a Government who have been in office this length of time, with majorities in the House of Commons which have sustained them through thick and thin, regardless of the disastrous outcome of those economic policies.
The reality is that the situation in Europe is serious, even dangerous, for democracy and stability. Unemployment stands at 16 million. We have seen the growth of racism and violence against ethnic communities in a number of EC countries. We should not be smug or sanguine about that, because racialist attitudes and attacks occur in our own country too, with monotonous and unacceptable regularity. There are tensions in Germany, France, Italy and other Community countries. As I have already pointed out, we have the worst increases in unemployment of all the Community countries.
The Government might have some excuse for failing to take any action on those matters if there was no consensus in Europe. But a consensus has emerged in the Community between employers and unions in the European Parliament, the President of the Commission and Commissioner Christophersen.
The Prime Minister of Norway, Gro Harlem Brundtland, has apparently written to our Prime Minister offering or suggesting talks between the European Free Trade Association countries and the Community countries on measures for economic growth and regeneration. I hope that she has had a positive reply, but from what we hear, like everyone else's, her suggestion has been abruptly dismissed—yet another opportunity missed, if not thrown away, by the Government.
I come now to the Maastricht treaty process. It is strange that, on the one hand, although the right hon.
Gentleman at first did not want to do it, the Government decided to suspend consideration of the European Communities (Amendment) Bill in the House, following the result of the Danish referendum; but, on the other hand, they were so tediously and painfully slow in taking any action at all to help the Danes to arrive at a position where accommodation of their problem may be achieved.
I hope that the right hon. Gentleman is right, and that that can finally be achieved in Edinburgh, but it seems unlikely. We know the real view of the Foreign and Commonwealth Office, because it was disarmingly presented to us in an internal memo which tells the whole truth, as opposed to the sanitised version of events placed in the House of Commons Library. I make our position clear. We want to see an accommodation of the Danish position. We think that that is important. I urge the right hon. Gentleman to do everything he can in Edinburgh to achieve it.
The Foreign Secretary referred to what the Birmingham declaration had to say on subsidiarity. It said:
We reaffirm that decisions must be taken as closely as possible to the citizen. Bringing to life this principle, subsidiarity or nearness, is essential if the Community is to develop with the support of its citizens. We look forward to decisions at Edinburgh on that basis.
It goes on to emphasise a few other points.
Since then, the Commission has produced its own version of subsidiarity. The right hon. Gentleman seemed to think that all was sweetness and light, but there are 22 pages of closely argued and somewhat tedious stuff here about the Commission's version of subsidiarity. We know that there is a divergence of views between what the British Government regard as the importance, significance and intention of subsidiarity and what is felt elsewhere.
The Select Committee on Foreign Affairs, under the chairmanship of the right hon. Member for Guildford (Mr. Howell), who is here today, has had some important things to say in its recent report about the problems of reaching a clear and agreed definition of subsidiarity. I am sure that the Foreign Secretary is aware of that, because he was the prime witness at the Select Committee's hearings. But there is no early prospect of Communitywide agreement on subsidiarity and how it will operate, and the right hon. Gentleman knows that to be so. Moreover, although we shall have time to consider that in more detail in Committee, subsidiarity needs the agreement of all. three Community institutions.
If subsidiarity means taking decisions closer to the people, as the Birmingham declaration says, we enthusiastically support it, because that implies more power devolved to regions, to Scotland and Wales and —a point that has already been made—to local authorities. That is how it is seen among our European partners, but I am not sure that that is what the Government have in mind, and we need to explore that in great detail when the appropriate opportunity presents itself.

Mr. Mike O'Brien: Does my hon. Friend agree that the inadequacy of the way in which the definition of subsidiarity was approached during the negotiation process shows the inadequacy of the Prime Minister's negotiation of the treaty, an inadequacy which has continued to be shown during his presidency of the

EC? That should have been sorted out during the negotiating process, because the Prime Minister now says that it is central to the treaty.

Dr. Cunningham: I agree with my hon. Friend. As I have said, final agreement on a definition seems unlikely at Edinburgh, but in any event the Government's attitude here to subsidiarity and to the Committee of the Regions seems a million miles away from the view taken elsewhere in Europe.

Sir Russell Johnston: Is it not strange to hear the Foreign Secretary quoting Chancellor Kohl as agreeing with him in his definition of subsidiarity, when everyone knows that Chancellor Kohl is a federalist? Consequently, to him subsidiarity means entrenched, legally defined subsidiarity, not subsidiarity according to the whim of officials.

Dr. Cunningham: I agree, not least because the Government's record has been to centralise more and more power and authority with every year that they have been in office. Whatever their claims for the importance of subsidiarity as part of the treaty, they seem unlikely now to want to divest themselves of some of that power.
We unequivocally support the enlargement of the Community. Austria, Sweden, Cyprus, Malta, Finland, Switzerland, Norway and Turkey want to join. That is good news, but is unfortunate that the process has stalled because of the decisions at Lisbon. I hope that that can be unblocked at Edinburgh, and that some progress can be made.
However, like my right hon. and hon. Friends, I have some serious objections about an application from Turkey to join the EC, at least until there is a satisfactory solution of the Cyprus question. Unhappily, the recent United Nations talks have stalled, with the Turkish Cypriots appearing intransigent and unhelpful.
My right hon. and learned Friend the Leader of the Opposition and I had the chance to discuss that matter yesterday, as I believe did the Foreign Secretary, with the Turkish Prime Minister, Mr. Demirel, and his Foreign Minister, Mr. Cetin. We made clear our position on that important point, and I hope for an assurance that the Government have done the same.

Sir Nicholas Fairbairn: Does not the hon. Gentleman consider it odd that we should be trying to get into the European Community a country that is in Asia—namely, Turkey? Also, has the hon. Gentleman, with his electric mind, managed to work out how many forests or rain forests in the country that he mentioned had to be cut down to provide every right hon. and hon. Member with 4·8 kg of bumf, multiplied by the 12 Members of the Community and all the others to whom that material was sent? I thought that Europe was supposed to be green.

Dr. Cunningham: It is Turkey that has applied to join the Community, and I am certainly not trying to secure its entry. The whole tenor of my remarks was that I would not support Turkey's application until a lasting solution can be found to the Cyprus problem. As to the demise of rain forests or other kinds of forests, I am more concerned that the Kurdish people of northern Iraq have to chop down vegetation and burn it simply to keep alive. Although that matter is not strictly on today's agenda, I hope that the Foreign Secretary, in developing a policy, will do something to help those people to resolve their difficulties.
The situation in the former Yugoslavia—which is a matter for the Community and one in which it has been deeply involved—is a developing and appalling tragedy. We supported the London peace conference and regret that it has not been effectively followed through—not by Cyrus Vance and Lord Owen, who seem to be working tirelessly to secure some kind of accord, but by members of the Community and the United Nations itself.
Why is it that mandatory arms embargoes are not being effectively enforced many months after they were first voted on by the Security Council? Why is it that, even now, we cannot effectively blockade the principal if not sole aggressor, Serbia, and bring the Serbians to their senses and stop the appalling slaughter in Bosnia? Why has Britain handled the refugee question so disastrously? We could not accept even a busload of people, all of whom had a secure home to go to. That besmirched Britain's reputation in the Community. I take no pleasure in saying that to the Foreign Secretary, but he must know that is true.
I do not know whether the right hon. Gentleman, in his role in the presidency, or members of the Security Council know who is arming Serbia and Croatia and how arms are entering those territories. I trust that we may have an assurance that armaments, weapons of war and supplies are not entering the former Yugoslavia from Community member states, as some suggest. That would be a shocking state of affairs. We must impose more effectively and rigorously the will of the United Nations, and I urge the Foreign Secretary to do even more than he has attempted, to secure a peaceful settlement of those conflicts.
Only today, the British ambassador in Albania—no doubt with the knowledge and support of the Foreign Secretary—warned of the deteriorating situation in Kosovo and Albania, and called for more effort and monitors, to prevent those territories from descending into more conflict.

Mr. Hurd: The hon. Gentleman is entirely within bounds in referring to that issue, which I dealt with at length in July, and on which there was a debate last week which is why I did not address it again. The hon. Gentleman is right about the need for greater effort, which is why we have during this time—although it is not strictly a Community matter—deployed troops to ensure the passage of humanitarian convoys through Bosnia, and strongly support the strengthening of sanctions, such as the Adriatic stop and search and new measures along the Danube. We must continue to do that, try to introduce monitors into Kosovo, and prevent the situation in Macedonia going from bad to worse.
I am sure that we were right to create the London conference in a frame work that included Lord Owen and Cyrus Vance, but we have a good way to go. I accept the thrust of the hon. Gentleman's remarks.

Dr. Cunningham: I hope that the right hon. Gentleman will go further and agree to early recognition of Macedonia, which has long met all the requirements. I hope that something can be done to stop Greece, which is a member of the Community, supplying Serbia—I will not say with arms, but certainly with petrol. There are daily stories of convoys of tankers travelling through Greece into Serbia when there is supposed to be an economic

embargo in force. Instead, we see it flouted day in, day out. The British Government have a major if not the sole responsibility for ensuring that proper effect is given to the blockade and to UN resolutions.
If that is not done, those voices calling for armed intervention—which I do not support—will grow louder and stronger as they see that the peace process is not working, because of a failure of will on the part of countries—some of them our partners, and all of them signatories to United Nations decisions—in quietly but persistently flouting those decisions.
The position, integrity and reputation of the United Nations and of the Community will suffer a devastating blow if the peace process fails. Islamic communities in this country and world wide will not forget what happened in Bosnia, and will not forgive us if they believe that their legitimate rights and human rights generally have been ignored by western countries. Neither will they forget—nor should they—if armed aggression and grotesque abuses of human rights are allowed to prevail.
The Foreign Secretary was right to discuss the former Yugoslavia at the Birmingham summit. However crowded the Edinburgh agenda may be, I hope that the European summit will return to the issue and redouble its efforts to bring peace to those tortured territories.

Mr. Nicholas Budgen: This debate comes at a convenient time—between the frantic activity of the paving debate and the start of the long journey through the Committee stage of the Maastricht Bill. This calm interlude will also allow many right hon. and hon. Members, particularly on the Conservative side of the House, to reconsider their attitudes towards the Maastricht treaty. A significant proportion of the Tory party must feel uncomfortable in this interlude and be deciding what their attitude will be towards specific parts of the treaty, and I intend to address a few words to them.
That section of the Tory party—I am sure that their views are reflected on the Opposition side of the House —will make an important contribution to the debate, and may save the Government from the real risk of the people demanding a referendum. If the House does not give the treaty proper consideration in Committee, without excessive and unfair pressure being exercised on individual Members, the smell will get abroad, and those outside will say, "Parliamentary democracy is not exercising its judgment properly. There can be no proper exercise of the judgment of individual Members of the House of Commons. Let the people decide."
Grave risks were taken in the way in which the Whips dealt with 50 or 60 right hon. and hon. Members a fortnight ago. [HON. MEMBERS: "No."] I say that with some knowledge of what was done. There is no doubt that we finished up with 26 right hon. or hon. Members voting against the treaty, as we saw it. The Government had a legitimate argument in saying that a high proportion of hon. Members and right hon. Members who were candidates at the last election did not distinguish their position from that of the Government, and that the Government had a mandate for the Maastricht treaty—that is, for the general principle of the Maastricht treaty.
As a former Whip, I take no exception whatever to proper and vigorous whipping exercised on those who are making up their minds.

Mrs. Currie: You did it.

Mr. Budgen: I did it. It was legitimate to say that anyone who was in any doubt would never get a job in John Major's Administration, and it was legitimate to back that up on occasion with abuse and even threats. However, the conventions of whipping in the Conservative party, as I understand them, do not allow interference between an hon. Member and his constituency and an hon. Member and his family. There can be no doubt whatever that those conventions were frequently and disgracefully broken for the paving debate. That may well account for the difference between the 80 hon. Members and right hon. Members who signed the "fresh start" motion on 2 June and the 26 who voted against the Government's motion.

Mr. Ian Taylor: Far be it from me to defend any of the tactics that my hon. Friend alleges were used by the Whips. Will he explain the presence of Lord Tebbit in the Members Lobby? Lord Tebbit was not looking his most benign and gracious during the immediate hours before the vote.

Mr. Budgen: As I said, this is a game that is played with a hard ball.

Mr. Taylor: Stop whingeing.

Mr. Budgen: I am not whingeing. It is important to understand that even a game that is played with a hard ball has some rules. As I understand the rules, they were broken a fortnight ago. It does not matter in the least to individual Members, and it does not matter in the least to the unnecessary paving debate.

Mr. David Winnick: Did the hon. Gentleman see the letter in The Times from his colleague the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn)? The hon. and learned Gentleman, who is a former legal officer, said that it was likely that a criminal offence was being committed because threats were made. It appears that the threats included giving the press details of the alleged private life of some Conservative Members.

Mr. Budgen: It is believed that that was done.[Interruption.] It is believed by my hon. and learned Friend. It was certainly done in my case in respect of my constituency. I have always believed that such behaviour was not within the conventions. I may be wrong about that, and it may be that the behaviour is within the conventions. All that I am saying is that the game was played with a much harder ball than usual a fortnight ago.
The Maastricht treaty was hardly discussed at the last general election. Nonetheless, it is important to understand that the Government are entitled to argue that they have a mandate for the Maastricht treaty. They do not have a mandate for every part of the treaty. The number of Members on this side of the House who signed the "fresh start" motion and the subsequent motion on 24 September shows that there is real doubt about at least some of the treaty's provisions. As we proceed with consideration of the provisions of the treaty I hope that we shall not find that heavy persuasion is offered to all hon. Members who suggest that they do not agree with any one part of the treaty. For the sake of argument, if hon.
Members do not think that the subsidiarity arrangements are sufficient, they should not be accused of bringing the Government down, or of wishing to attack the Prime Minister or to smash the whole European Community.
If the country is to have the benefit of proper parliamentary democracy, we should not have an irresponsible debate about the treaty. I repeat that it is legitimate for the Whips to say to any hon. Member who votes against any single part of the treaty that he or she will never get a job. That is a proper and reasonable constraint which should be exercised against any hon. Member. But there are conventions, even in a game that is played with a hard ball. If the Government misbehave as badly during the Committee stage as they did in relation to the paving debate, it will be obvious to the country that the provisions of the treaty are not being properly examined. If the country comes to the conclusion that the treaty is not being properly examined, the demand for a referendum will become even stronger.

Mr. Ray Whitney: Will my hon. Friend explain why the House voted for the treaty on Second Reading with a majority of 244? Does that not show that the deep misgivings which he suggests are so widely held are not widely shared but are confined to a small minority of the House?

Mr. Budgen: We shall find out where the majorities and minorities are only during the Committee stage. Of course, parliamentary democracy does not depend on irresponsible voting. Any Member of Parliament who votes and thereby embarrasses his party, whether it be the Government or the Opposition, should be prepared to take the political consequences of his vote.

The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones): Does my hon. Friend believe that parliamentary democracy is reinforced by a referendum?

Mr. Budgen: No, I am opposed to referendums. I believe in parliamentary democracy. I hope that I have made it clear that parliamentary democracy depends on a relatively honest expression of opinion by the House.

Mrs. Currie: That is just what we have.

Mr. Budgen: That depends on the extent to which opinion is prevented from being expressed. My argument is that many hon. and right hon. Members on the Conservative side of the House have already expressed significant disquiet in public if not about the whole of the treaty, at least about significant parts of it. I hope that they will express their views in Committee, and I hope that they will not be prevented from expressing their views by wild suggestions that there will be a general election, the Prime Minister will resign, they will be de-selected or the Whip will be withdrawn every time they wish to express some reservation about some part of the treaty.

Sir Nicholas Fairbairn: Will my hon. Friend clarify a point that our right hon. Friend the Foreign Secretary rather fudged? Will he confirm that when a treaty between —in the present instance—12 parties is in any way altered by any of the parties, and the alteration is not confirmed by their Parliaments, the whole treaty must be renegotiated and brought back to the 12 Parliaments? If that is the case, any amendment to the treaty will inevitably mean that we must start all over again.

Mr. Budgen: That is my understanding. As we begin to consider the various aspects of the treaty, we shall face the most fashionable and current threat: the threat of renegotiation.
If the treaty is as important as its supporters suggest, what is wrong with dealing with it slowly? I can give an example of domestic legislation which was very important, but which the British Parliament considered very slowly —and, in my opinion, only got right the third time. I observe with increasing disquiet the belief apparently held by Ministers that bashing a Bill through with a guillotine will produce the answer to a problem.
I am remembering the way in which the British Government dealt with the question of industrial relations. As early as the late 1960s, it was obvious that industrial relations legislation was needed. The Labour party presented its "In Place of Strife" proposals; my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) produced his Industrial Relations Act 1971, which went the same way. Only on the third occasion, when the matter was dealt with slowly and methodically, did we get it right with a series of legislative measures.
The same will apply if the peoples of the EC are strongly in favour of a third—and, I contend, significantly federal—step. In that event, what is the problem if this particular attempt has to be renegotiated? Let us suppose, for the sake of argument, that the desire of the peoples of Europe is analogous with the desire of the German people for reunification—a desire that the Germans nurtured in their breasts for 45 years, and whose fulfilment, when they saw the chance, they grasped with joy, seeing it as the basis of their national psyche. If the peoples of Europe feel the same way about the Maastricht treaty, they will not be put off by a hiccup in the British House of Commons: they will come back to it as quickly as possible.
The political classes of Europe do not want a renegotiation because they know that, if they had to renegotiate the treaty, it would be rejected—and resoundingly rejected—throughout the European legislatures. I suggest that we use this calm interlude to resolve to do our parliamentary duty and consider the details of the Maastricht treaty without let or hindrance, and without another period of excessive and unconventional threats. Let us understand that if a renegotiation proves necessary, and if the peoples of Europe genuinely want something like the Maastricht treaty, they will get it irrespective of any slight delay in the House of Commons.

Mr. Charles Kennedy: I do not intend to follow the speech of the hon. Member for Wolverhampton, South-West (Mr. Budgen) in every respect—not least in respect of his closing remarks, the logic of which I did not entirely understand. In the earlier part of his speech, however, he allowed a positive horror story to unfold before our very eyes. If he finds life on the Conservative Benches as deeply unpleasant as he suggested in describing the activities of his party two or three weeks ago, even he might prefer life in the European Parliament at some future stage. I am sure that MEPs do not indulge in such dreadful tactics as the gravediggers in the Conservative party apparently went in for to whip their malcontents into line on the night of that vote.
I am mindful of some of today's press comment about the Foreign Secretary's future in his present office. It

struck me that—even allowing for the right hon. Gentleman's cold, and his rather weak voice—his opening speech had the tone of a near-valedictory address, as far as it concerned foreign policy management. It could well have provided a metaphor for what is about to happen, in that, as the Foreign Secretary concluded his speech—on rather a lame note—the Chancellor of the Exchequer left his place. If we are to believe what we read in the press, that may be about to happen in another sense, with the conclusion of what has been a fairly wretched European presidency for the Government.
At the outset of his speech, the Foreign Secretary said that he had outlined an ambitious shopping list to the House on 2 July, at the beginning of our presidency. It seems that those ambitions have not been met—in some cases for reasons entirely outwith the control of Government, in others fully as a result of Government incompetence.
Let us consider the most recent developments: yesterday's visit by the Chancellor, and his discussions with his fellow Finance Ministers at European Community level. Those developments provide a classic example of the confusion that appears to be at the heart of Government policy. One day, the Prime Minister's team is telling the world that Britain is pressing for a European growth plan—and many of us would say "hear, hear" to that, given the level of unemployment throughout the Community and the effect of the recession on so many member states. The next day—indeed, this morning—the Chancellor insists that that plan has been blown out of all proportion.
On the one hand, No. 10 Downing street says that Europe should have a co-ordinated growth programme, along the lines of Britain's recent autumn statement; on the other, the Chancellor advises everyone that the autumn statement is not a "dash for growth"—that was his phrase. A complete contradiction is at work here: it is little wonder that our presidency has become more incredible, as well as lacking in credibility, as time has gone on.
But the central criticism that surely must be made of the six-month period that we are discussing is very simple. Not least in regard to the Maastricht treaty, and matters European generally, the Prime Minister has behaved rather like a rabbit caught in the headlights: he has been unsure which way to dart, for fear of the consequences he sees on every side, and he has been too indulgent—too willing to play into the hands, or remain a prisoner, of some of the xenophobes who sit behind him. He has not been willing to confront them and take them on, and that is a failure of leadership.
The Prime Minister nearly succeeded in scuppering the Maastricht process a couple of weeks ago, given the closeness of the vote. Such action takes some ability on the part of a Prime Minister. When the House had approved the negotiating terms set out in advance of the Maastricht summit, and the terms then agreed by the House—albeit with objections and qualifications from different quarters and different parties, my own party included—and then given the Bill a Second Reading with an overwhelming majority, he reduced that majority to single figures, even with the support of my hon. Friends to do that calls for a fair degree of political incompetence; and I am afraid that the incompetence that we have seen at home has been more than matched by the incompetence with which too many European matters have been approached during our presidency.
Let us take subsidiarity, which the Foreign Secretary breathtakingly touted as one of the great achievements of recent years. The Chancellor announced the suspension of sterling from the exchange rate mechanism; hard on the heels of that came the announcement of the Birmingham summit. Following that fateful set of events, it was anticipated that the Birmingham summit would deal with some of the matters involved, but the ERM and consequent decisions hardly came up.
We were told, and we have been told again today, that Birmingham was all about subsidiarity and recognising the limits of the Community. We were also told that the Government were getting their message across at the European level. Subsidiarity, therefore, had become all-important.
The Foreign and Commonwealth Office recently published "Britain in Europe". The way things are going, one wonders whether there should be a question mark at the end of those three words. However, it is a substantive statement—Britain in Europe. What is most interesting about the Prime Minister's foreword to that publication, only a few weeks after the Birmingham summit, is that subsidiarity is not mentioned at all. One wonders, therefore, just what policy is being pursued and how clear-minded the Government are about their policy.

Dr. Norman A. Godman: The hon. Gentleman surely cannot be happy about the Government's definition and likely implementation of subsidiarity, is he? It seems that subsidiarity, as far as this lot is concerned, means the dispersal of power between Brussels and London and that any dispersal of power to Scotland and Wales does not figure in their thinking.

Mr. Kennedy: I am grateful to the hon. Gentleman. As both of us represent Scottish constituencies, we see absolutely eye to eye on this issue. Both of us know that our respective parties view subsidiarity in the United Kingdom context as meaning a Scottish parliament and the devolution of more power to the English regions and to Wales. I suspect, however, that what the Government mean by subsidiarity is obstructionism—the ability to stop certain issues at Whitehall level without having to refer them to Brussels or without their having to be sent down the line for decision in Cardiff, Edinburgh or the English regions where legitimately many of them could be decided, many of us would argue, much more efficiently and much more effectively than they can be decided in Whitehall.

The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones): Is it the hon. Gentleman's view that decisions about how regional government or local government powers should be distributed in Britain should be taken in Brussels, riot in this House? Is that his interpretation of subsidiarity?

Mr. Kennedy: No. I accused the Government and, by implication, the Minister of viewing subsidarity as a good opportunity for obstructionism. The Minister is trying not so much to obstruct as to obscure. Of course I do not suggest for one moment that the structure of Government in the United Kingdom should be decided in Brussels. My argument is that the definition of federalism for which we argue is the federalism that one sees in Germany—a positive, practical federalism, with the devolution of power to the regions, away from nation-state level. The

centralisation of power in Whitehall and Westminster, which all too often is unaccountable, is as unacceptable as the centralisation of power in Brussels would be.

Mr. Garel-Jones: The reason that the principle of subsidiarity and its acceptance by our partners to the treaty is so important is because, as President Delors said, subsidiarity now makes it clear that the presumption in all cases is that action will take place inside a member state and that action by the Community will be the exception. Therefore the presumption is that decisions made in the Federal Republic of Germany about the way that it wishes to distribute powers in the federal state is for it and that the way in which powers are distributed inside the United Kingdom is for this House and this Parliament.

Mr. Kennedy: I understand what the Minister says, but the point that I put to him—if he wants to be politically and philosophically consistent—is that if he says that the principle of subsidiarity means that there is no point in taking a decision at Brussels level that can be more effectively and properly taken at Westminster level, there is equally no point in decisions having to be taken at Westminster level that could more properly be taken at Cardiff, Edinburgh or regional level. The Government do not want to listen to the case that we make. If that principle had operated in this country, many of the developments ushered in since 1979, a great number of which are now being flung back in our faces as economic recession bites ever more deeply, would never have been bulldozed through in parts of the country where the Government commanded scarcely a mandate, far less a majority.

Dr. Godman: Is not the trouble with the Government's interpretation of subsidiarity—compared and contrasted with the German definition of article 3B and the Spanish interpretation of article 3B—that if Maastricht were ratified, article 3B would become justiciable, which means that the Government would politicise the European Court of Justice?

Mr. Kennedy: I am grateful to the hon. Gentleman. That is an additional argument that is likely to be further deployed when we consider the Bill.
I am not sure whether the Foreign Secretary referred in his speech to the Committee of the Regions. Little progress has been achieved. I hope that the Minister who is to wind up the debate will say something about the Government's thoughts about timetables, the mechanisms for selection or appointment, and so on. That is important for Europe as a whole and certainly for Britain. Many of us believe that Britain's input will be an important counterbalance arid will provide political opinion of a broader range than the Government's alone when it comes to making decisions at Community level.
The Foreign Secretary referred also to enlargement of the Community. That has broad political support. Nevertheless, one has to voice a suspicion. I do not criticise the Foreign Office. It is a criticism of some Conservative Back Benchers and others who are critical of the European process as a whole. Enlargement should not be embraced as a means of trying to slow up the Community mechanisms per se. We are against that. I understand that the Foreign Office supports our view.
Before there can be any enlargement of the Community, we must face up to the present difficulties


over providing help to the more recent entrants to the Community which are, in per capita terms, poor members of the Community. There will have to be a bold and, one suspects, generous settlement at Edinburgh in relation to cohesion funding as a whole. If the cohesion funding issue is to be resolved, there will have to be consideration of structural funding and regional funding as a whole, so that after 31 December next, with over 90 per cent. of the single market completed, the so-called golden triangle at Community level does not leave the peripheral parts of the Community, be they in the southern Mediterranean or in the north-west highlands of Scotland, at an excessive disadvantage and unable to play their full part within the single market.
The United Kingdom Government will therefore have to recognise properly and implement the additionality principle for many of the structural funds. All too often that principle has been abused. Moreover, structural funding arrangements for the period 1994 to 1997 are being made. The case put forward by the various public bodies and agencies concerned with the Highlands and Islands is to move our area from objective 5B status, under which regions receive only 5 per cent. of the total European structural funds at between 25 and 50 per cent. assistance rate, to objective 1 status. Those with objective 1 status are allocated 65 per cent. of the total European structural funds, at an assistance rate of between 50 and 75 per cent. of total public authority support per project.
The Minister will be aware of the difficulties that have been experienced by the highlands and islands economy, such as the cyclical nature of North sea fabrication contracts and the dearth of orders in the foreseeable future, the rundown at Dounreay and the reduction in regional aid, all of which have had a disincentive effect on the local economy. Moving us from category 5b back to category 1 for structural funding assistance would be a significant psychological and practical boost. The Government have been fairly positive so far: we hope that they will move towards delivering the goods at the Edinburgh summit.

Mr. Roger Knapman: The hon. Gentleman is advocating more expenditure on cohesion funds and regional development grants. Which countries will pay for that additional expenditure?

Mr. Kennedy: Let us be clear about which country has never been honest about structural funding—Britain. The additionality principle has been consistently abused by the Government, not to finance additional projects—road improvements, bridge construction and so on—to improve the economy of the regions but to replace the national Government commitment. That has caused considerable annoyance in Europe and has not helped us to win any friends. Bruce Millan, the Labour commissioner, has been able, not least with the RECHAR programme, to flush out the issue and to focus public attention on it, and I pay tribute to his work.

Mr. Milligan: Will the hon. Gentleman give way?

Mr. Kennedy: Will the hon. Gentleman forgive me if I do not do so? I do not want to take up any more time.
Many critics of further European integration have said, "Look at the situation in Bosnia and in what was

Yugoslavia; there is a classic failure. How can people who want greater European integration claim that that will not happen here when Europe cannot deliver a better state of affairs?" If we deny the Community mechanisms to resolve differences or to promote further collective policies, the full tragedy of what can happen may emerge. Many of us argue that the tragic circumstances in Yugoslavia strengthen the case for a more integrated European foreign and defence policy.
One need not apologise for arguing that positive messages emerge from that, and perhaps the most positive is that of democracy itself. The Foreign Secretary, using a characteristically British phrase, spoke of how some other member states were more "buttoned-up" than us in their approach to openness in government, yet Britain has no freedom of information legislation, no citizens' rights defined in a Bill of Rights or written constitution, and one of the most secretive, centralised systems of government imaginable. That is why many of us argue that, to achieve democracy and openness, we need a more federal approach within the United Kingdom and within an increasingly federal European Community.
Perhaps the greatest criticism that can be made of Britain's six-month presidency is that, if one wants to sell an idea to the public outside—we can argue about whether that is best done in the Chamber or in a referendum—one must sell it positively and with hope. The severest criticism of the Prime Minister's behaviour in the past six months is that he has tried to sell Maastricht and the European Community as much by what the treaty will not do, by what it will not intrude upon, by what it fails to address and by what it leaves out as much as by what it will deliver and by the hope and mechanisms that it can put in place for a more united and positive Europe. That case continues to seek a hearing. We are not getting it from the Government and we did not get it from the Foreign Secretary, which scarcely fills anyone with confidence for the remainder of the period up to the Edinburgh summit.

Mr. Peter Temple-Morris: I cannot agree with the final words of the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), but I am pleased to follow him because it gives me the chance to pay him and his hon. Friends a tribute for voting for Europe in the recent paving debate. That healthy trend of showing a willingness to support the Government has not been apparent tonight, but we cannot have everything. At least Liberal Democrat Members have traversed the correct direction on at least one occasion. I am aware of the constituency pressure that was placed on some Liberal Democrat Members, so my tribute is well meant.
I wish to concentrate on some of the problems that we must address at Edinburgh and what we might be able to achieve. We have heard much gloom, doom and difficulty about the Edinburgh summit, but it is not so bad as all that. A good start has been made with GATT and the single European market, which has always been championed by the Government, who have implemented and played a leading role in what, from the beginning of next year, will be an increasing reality.
My approach to Edinburgh is not so pessimistic as it might have been even a few months ago, or certainly in the middle of September, when it seemed that there was a serious danger that the British presidency would be


seriously disturbed and the Edinburgh summit would become rather unrewarding. We shall not be isolated, which was possible, and we shall not return to the ghastly circumstances of previous years in Europe. In addition, there are clear signs, although not necessarily the best signs for the Community, that other countries are now experiencing difficulties.
I speak of all the perfect Europeans—I am a supporter of the European Community, but I am not a fanatic—who were prepared to lead the gallop at a pace that is being seen to be unsustainable, but nevertheless must continue to be followed. The French expressed many views in their referendum and I am sure that at Edinburgh we shall see that their attitude to GATT is less than Mr. Clean. The Germans, although I do not criticise them for doing so, are seen to conduct a nationalistic economic policy and they, too, will have something to answer for. We therefore start from a much more even position than might have been the case.
The Maastricht ratification process must now be confirmed and re-emphasised. Our electorates will expect a new timetable for ratification to be agreed in Edinburgh. The old timetable will not be achieved, so we must tackle the challenge of meeting the new one. I hope that the Government will press on with the Maastricht Bill, despite the fascinating speech of my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) about the Government Whips Office. I hope that the Government will not totally lose heart in the face of the observations by my hon. Friend. I hope that I and many of my hon. Friends can expect the Third Reading of the European Communities (Amendment) Bill in the House no later than May next year. I believe that we should make that clear as soon as is practically possible.

Mr. Salmond: Did the hon. Gentleman see the Channel 4 programme, "A Week in Politics", on Saturday night? Perhaps the Government Whips Office should be the least of the worries of the hon. Member for Wolverhampton, South-West (Mr. Budgen). He should perhaps worry more about the demonic powers of the Minister of State, Foreign and Commonwealth Office, the right hon. Member for Watford (Mr. Garel-Jones).

Mr. Temple-Morris: I always wonder why my right hon. Friend the Minister encourages the national press into certain excesses of comment. I have seen nothing but gentleness and understanding from him, including during his time in the Whips Office, when I was occasionally a rebel on somewhat heavy issues. Although on this occasion the pressure is on, and although I have suffered myself from that pressure—though not exerted by my right hon. and allegedly demonic Friend—I have always believed that if one cannot stand the heat, one should get out of the kitchen. We should not be put off by the speech of my hon. Friend the Member for Wolverhampton, South-West, which seemed to be addressed more to the politics of the Committee stage than to anything which might or might not have happened to him.
At a time of recession, the general economic situation must be addressed. It is not a time to spend more, whether on convergence, on cohesion or on anything else, but it is a time to spend what we have within existing policy on getting out of recession. I am very encouraged that that policy is now assuming a European context for Edinburgh.
The next main point that will have to be addressed—we are not hearing so much about it now because of the macro-economic issues—is our old friend the exchange rate mechanism. Something will have to come out of Edinburgh to give people more confidence in the future of that instrument. The United Kingdom is out of it, but its policy is to get back into it when it can, according to its economic progress. Others are under severe strain. Although it was not their fault because they were unbalanced by their very success, the Germans completely unbalanced the whole system. At Edinburgh, we should perhaps begin the process of providing the exchange rate mechanism with greater flexibility to withstand speculators.
I give a slight warning. There is too much a tendency here when talking and thinking about the ERM to assume that Britain can dance in and out as it wishes, and that somehow everyone will let us do exactly what we like. It is assumed that if we do not want to go in, we need not, and that we are entitled not to go in. Without doubt, there will be increasing pressure on us, bearing in mind the economic difficulties of other countries, to make up our mind. With that pressure, we shall not be permitted indefinitely to waltz around with a low-value currency asking Germany and France to buy our goods if those countries are under the disciplines of that system. Being outside the ERM is not a permanent option. Everyone tolerates our position at the moment, but we must address it while we have the credit and the weight with which to do so. Rather than appearing to be backing off from the ERM, we must go in to try to reform it from within.
We must also address the overall European financial approach, internal and general. There are obvious differences on Delors stage 2. Differences have already crept in between those who are paying for it and those who expect to benefit from it. For a variety of reasons, those who are paying for it are in no condition to pay very much. I want to see convergence and cohesion, which are central to the argument for an eventual single currency. Having said that, now is not especially the time, and I desperately hope that we shall not get into a north-south tangle between the payers and the receivers. It is unnecessary at this stage. We can set out the demarcation and we can do as much as we can. On general economic policy, I welcome the approach to the European infrastructure at a European level.
In considering what it might be possible to achieve, the first issue is ratification. The Danes have been mentioned a number of times. Obviously, we must accommodate them, because there are no smart solutions without them. They have the responsibility for the Maastricht treaty and they must come within it. It is not on for the 11 to go ahead with all the stresses and strains at the moment. To say that it was on would, in a funny way, release the pressure on the Danes. We cannot renegotiate the treaty because it would then have to be re-ratified. I have always understood that to be the legal position.
I adopt the statement made by my right hon. Friend the Foreign Secretary. He said that, because the Danes do not want to renegotiate, for the reasons that I have just given, we seek a legally binding outcome. Reading between the lines a little, the Danes' demands are not too horrendous. They make dramatic demands about defence, which is one of the vaguest parts of the treaty. The Danes talk about


opt-outs from European monetary union when we already have such opt-outs, so that issue should not present insurmountable difficulties.
I repeat this point because it is so important. With ratification, the country and the House must keep up the pace. I and a number of my hon. Friends believe that the Third Reading of the Bill should be in May because if it is in May, it is before the final Danish summit. Our decision to ratify and our progress towards ratification will be there for all to see. There will be eventful times in another place, but we must not miss out on being at the heart of Europe. We must not miss out or be seen to be dragging our feet at a time—this is apparent now and will continue to be apparent—of important European development. If we miss out now or at any time, there is a danger of a two-tier Europe, a point to which other hon. Members have not yet referred. With this country's history, I do not see us as part of a second tier.

Dr. Godman: Is the hon. Gentleman confident that the Danes will reverse their original judgment? If they stick by that judgment, what happens to the treaty? Can it be resuscitated?

Mr. Temple-Morris: The matter is plain for all to see. We shall be reasonable with the Danes, we shall make every effort to accommodate them and there will be a second referendum. At the end of the day, I do not believe that the Danes will isolate themselves, for all their fears about Germany and for all their apprehensions about the Community as a whole. If the Danes do not ratify it, the treaty as it stands will be at an end. The I I could, of course, immediately sit down, sign a new treaty and start the process all over again. A new treaty would, of course, have to be re-ratified. We are talking about legally enforceable matters to satisfy the Danes. I believe that I have outlined that plain position correctly.
After ratification comes subsidiarity, which has been well discussed in the House. As I understand it, subsidiarity is not a legal concept in the European Community context, although it is in an established federation such as the Federal Republic of Germany. There is no suitable legal instrument, there is no European constitution and there is no European constitutional court to turn it into a legal concept. We must not muddle nationalism with Community internationalism. We are looking here for clear political and governmental guidelines at all levels, and for practice in Brussels by the organs of the Community, and especially by the Commission and the Council of Ministers. In that regard, I welcome what my right hon. Friend the Foreign Secretary said about the burden of proof.

Dr. Godman: If the treaty is resuscitated or ratified, article 3b will become justiciable. That must surely mean that, sooner or later, judgments by the European Court of Justice will be involved.

Mr. Temple-Morris: That does not alter what I was trying to say. Once article 3b is included and becomes justiciable, a body of precedent will gradually be built up. We are not talking about a federal Europe in any event, but under the treaty we should still be a long way away from the established constitutional structures of member countries of whatever system. It is not the same ball game.

No doubt ways will be found to raise matters legally, and a body of precedent will eventually be built up. That is in the best English tradition—the common law rather than a whole load of written statutes.
I stress that we shall not be able to do very much about Community finance. We should not have an argument: we should establish our parameters and do what we can.
That brings me to overall spending on infrastructure. Because of our somewhat illustrious history, an important point often eludes us: we are an offshore island, and beyond us is another offshore island—Ireland. We must recognise the importance of infrastructure and of access from both Northern Ireland and the Irish Republic through Wales. Access from the north of England is as important as for the Principality. To my mind, it is verging on the disgraceful that a business man who can get into a train in Paris and shoot off at haute vitesse to all parts of Europe will come grinding to a halt at Dover. We should remember that that Parisian business man may want to do business not in London but in the regions—in Manchester, Liverpool or the Principality. We have a great European interest in that, and it is a very good trend.
What sort of Europe do I want to emerge from Maastricht and Edinburgh? I want us not to lose the prospect of a single currency, as I said on Second Reading of the European Communities (Amendment) Bill. There is too much mincing of words on that subject. I want the security of that prospect—for myself, my children and my country. Anyone who considers what has happened to the pound—not just since the war, but before it—will have some idea what I am getting at and will also know of the sophistication of the pure speculation which present structures, I am afraid, permit.
One of the victories of Maastricht was intergovernmental co-operation, and may that trend continue—in respect of defence as well as foreign affairs. In the midst of our intergovernmental co-operation, we should not forget that increasingly in defence, bearing in mind the position of the United States, and in foreign affairs, bearing in mind our increased responsibilities as Europeans, we need to act together. Together we can be effective: as a little nation we can do little. If we do not recognise that, we let ourselves and our history down.

Mr. John Hutton: I want to speak about both the Maastricht process and the draft European Communities budget for 1993.
Most hon. Members will agree that this is a time of great change and rapid development in the Community and in our relationships with other nations. For those of us who look forward to a wider and deeper Europe—to a Europe for people as well as for business—it is also a time of rising expectations.
There are dangers in the process of developing closer co-operation, however. As my hon. Friend the Member for Copeland (Dr. Cunningham) said, the rise in fascist violence in Europe—particularly in Germany, but in other member states, too—must give all hon. Members a real sense of outrage and concern. Resisting that racist tyranny is one of the biggest challenges facing all of us in the Community today. That is why I believe that the Maastricht process is so important for Europe.
Maastricht is important in that context, as in others, because it offers a vision, in principle and in practical


terms, of a Europe in which member states work more closely together—where political and economic cooperation between member states becomes central to our relationship with each other. I am a strong supporter of the Maastricht process.
Sadly, however, the British Government seem to be obsessed with fighting yesterday's battles and appear always to be looking over their shoulder at non-existent enemies in Europe. I refer in particular to the so-called Brussels bureaucracy. The result of all this is that we often create the impression that we are not good Europeans—that we are not truly at the heart of Europe. That impression will run contrary to Britain's long-term economic, social and political interests.
Tonight, I shall concentrate on other aspects of the developments within the Community in the past six months and, in particular, on developments in the European shipbuilding industry and the problems of defence-dependent communities that now face the prospect of a rapid increase in unemployment as a result of the end of the cold war. In both these respects, I believe that the Community is failing to pursue the right policies—policies that will create and help to save vital jobs, skills and technologies not only in Britain—in communities such as my constituency—but in other areas of the continent.
Paragraph 12.16 of the White Paper contains a rather acerbic and short statement relating to the derogations, now part of Community law, for aid to the former east German shipyards.
All hon. Members will know that, in the past 12 months and, indeed, before that, Europe has continued to witness a major decline in our shipbuilding capacity. In the past six months, thousands of jobs have been lost all over Europe. I am referring not only to developments in my constituency, which I believe has lost more jobs in shipbuilding in the past two years than any other region of Europe—Barrow and Furness has lost more than 6,500 jobs since 1979—but to the problems facing communities throughout the continent.
I wish to refer to Vickers Shipbuilding and Engineering Ltd. In the shipyards in my constituency, we have some of the finest technology and skills that are to be found anywhere in Europe.
Throughout a period of immense job losses in European shipbuilding, the Commission continues to predict that worldwide demand for new merchant ships will double over the next 10 years. We ought, therefore, to be pursuing policies that will preserve shipbuilding capacity so that we can take advantage of the expected increase in work; yet, throughout, the European Community and its member states have been pursuing a policy that will lead to the eventual evaporation of our shipbuilding and marine capability in Europe. That is a ludicrous and outrageous policy for the Community to pursue.
We need a new maritime policy which should recognised that shipbuilding is not a smokestack industry or a thing of the past. British shipyards, of which I can speak with some knowledge, are modern and well equipped; they are centres of engineering excellence without parallel in Europe. Why, therefore, do our Government and those of our member states—and, in particular, the Commission—remain intent on pursuing policies that will lead to a substantial reduction in our engineering capability?
I am a passionate believer in engineering and its role in securing the future of our manufacturing industries. There is a real danger that Europe will lose one of its greatest industries needlessly. The British Government must not sit back and sacrifice our shipbuilding and marine engineering industries on the high altar of free market forces. Why should we surrender a lucrative market to the shipbuilders of the far east and the Pacific rim?

Dr. Godman: Is my hon. Friend aware that a recent report, commissioned by the European Commission, suggests that a gap of about 22 per cent. remains between the price of ships purchased in the far east and those from the best European yards? The seventh European Community directive on shipbuilding—the shipbuilding intervention fund—should surely be succeeded by an eighth directive on 1 January 1993.

Mr. Hutton: I agree, and I suspect that my hon. Friend must have been looking at my speech over my shoulder, although I know that he would not do such a thing. Like him, I think that the Government need to consider how the intervention fund regime applies to British yards. They should extend its application to cover British warship yards.
In the early 1980s, there may have been a rational justification for saying that the British warship yards had secure futures, as they had secure and prosperous order books. That was especially true of VSEL in Barrow, until the publication of "Options for Change", when it lost £3 billion-worth of orders at a stroke. It is not possible for the shipyard in my constituency—or, I suspect, yards in other constituencies—to make good on its own the loss of defence work and the huge adjustment in logistics, competitive outlook and marketing that is necessary now that defence work is set for a rapid decline.
Like my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), I believe that the initial justification for not applying the intervention funds to warship yards has disappeared. The shipbuilding industry in Britain and in Europe has had to face a substantial and material change of circumstances. If we are to maintain our shipbuilding capacity—I argue that that is essential if we are to maintain a successful heavy engineering base—we must consider the argument of my hon. Friend the Member for Greenock and Port Glasgow about closing the gap in competitiveness between good, well-stocked and well-equipped British yards and some of the low-cost yards in the Pacific rim and the far east. I hope that the Government will press in the Council and the Commission for an eighth directive, which will allow British yards to compete on level terms with those other yards.
One of the great deficiencies of the Government's While Paper and of their policy towards industry in Britain and Europe is that they do not recognise the important role of engineering—especially marine engineering, which has a substantial future and not merely a past. I sometimes wish that the Government would begin to recognise that.
I note that a resolution approved by the European Parliament on 17 September began to recognise the need for a European initiative to support and help areas such as my constituency, which are suffering the severe effects of a rapid and unpredictable decline in defence work. For example, in the late 1980s, 1·5 million people in Europe were employed in the armaments industry. The European Parliament is convinced that, during the next three to five


years, between 300,000 and 500,000 jobs will be lost in the armaments industry, and I share that view. The figures are almost precisely comparable with job losses in the iron and steel industry between 1975 and 1985. During that period, the European Community developed a range of imaginative schemes to help iron and steel communities to cope with that sudden demise.
The European Commission and the Community should take the initiative and start to develop an effective response to the crisis affecting employment in the defence industries of Britain and Europe, because they are of immense importance to our manufacturing base. Hon. Members on both sides of the House who have defence establishments in their constituencies know of, and can testify to, the high levels of skill, especially in engineering, to be found in such companies.
Will the Government consider a range of new initiatives to reward innovation, and to encourage enterprise and diversification among our defence contractors? Why are the Government ending the peripheral programmes, which have benefited my constituency and others suffering from the decline in defence contracting? The peripheral programmes were developed to provide practical aid to defence-dependent communities. Their needs have not diminished during the past couple of years, and will get more intense. It is silly of the Government to withdraw the peripheral programmes from the European Community budget, but I understand that they have asked the Community to take them out. Last year, 50 million ecu were spent on the programme, but there is to be no budget allocation this year.
What is the European Community doing to help the defence industries to adjust? I am afraid that the answer is, not a lot. We have to act quickly and decisively or we shall lose huge sectors of Europe's engineering industries—probably for ever. In both the shipbuilding and the defence industries there are signs of complacency and inaction in the United Kingdom Government and the Community. That drift is damaging to Europe's long-term industrial competitiveness and to the economic prospects facing my constituents.
The problems that face both industries cannot and will not be solved by a strict adherence to market forces. Many hon. Members believe that those same market forces are creating the problem. In my constituency we have been dependent on defence-related contracts for the best part of 25 years. VSEL used to build merchant ships as well as naval vessels. Since the early 1980s, we have secured only naval shipbuilding work. When the demand for our products begins to evaporate, as it has done quickly with the publication of "Options for Change", we are not able to make the necessary adjustment. Our principal supplier has simply walked away and is telling us, and other communities like ours, to get on with it as best we can, as it is a market problem and market forces will sort it out. I am afraid that market forces will not solve that problem, and nor will they solve many others.
At the heart of a successful strategy for the marine and defence industries is a strategy to allow them to diversify. That is the secret of success and it will require the Government and the Community to act quickly. Inaction will confine many thousands of our fellow Europeans to the misery and frustration of mass unemployment for

years to come. My hon. Friend the Member for Copeland (Dr. Cunningham) talked about 16 million unemployed people in the European Community, and that is a conservative estimate. I refuse to countenance confining some of the most highly skilled and gifted engineering workers in the Community to enforced unemployment, possibly for many years. It is imperative for the Government and the Community to take the sort of action that I have outlined to help the shipbuilding and defence industries.

Mr. Ian Taylor: I welcome the positive remarks about the Maastricht process that the hon. Member for Barrow and Furness (Mr. Hutton) made at the beginning of his speech. I hope that he will be a positive European in Committee, and I am sure that we shall find ourselves working closely together during those days.
I shall not embarrass him further, but I hope that he will have a word with those on the Opposition Front Bench. After the recent close vote on a Wednesday, I arrived in Amsterdam airport, waved my passport and was stopped. The customs officer said, "You are British, are you for or against Maastricht?" He did not even know that I was a Member of Parliament. I said, "I am for." He smiled and said, "You are not one of those British socialists then."
The Labour party has a lot of image-building to do after its unprincipled behaviour that night. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), who is no longer in his place, could also take note that he was dismissed by our Dutch friend as a British socialist.
The Committee stage of a Bill can be quite complicated, but during that stage of the European Communities (Amendment) Bill we must continually show the relevance of the process and of the European Community to the British people and to the problems that we face. Too often, we get bogged down in detail which is not easily understood, or we highlight the negative aspects of the European Community and emphasise what we are against rather than what we are for.
That relevance of the Community—the inextricable link between the economic and political development of the Community with happenings in this country and our efforts to revitalise the British economy—is why I particularly welcome the fact that at the Edinburgh summit we shall address the problem of how Europe as a whole can overcome the recession and the slow growth which is afflicting us and making all our political problems more difficult to solve.
That does not mean that we must have a sudden burst of further fiscal relaxation—in other words, more Government expenditure—and I noted carefully that the Chancellor of the Exchequer said that the funds would come largely from the private sector and the European Investment Bank. I welcome developments of that type.
At the same time, it is vital for the British people to understand that for a country which depends so much on trade—our trade with Germany is almost as large as our trade with America and Japan combined—we cannot solve our problems solely within Britain. We cannot have a British monetary policy solely for British conditions. If we tried to do that, either we would get a disproportionate


fall in sterling, which would have inflationary consequences over time, or we would force up interest rates at the long end of the yield curve because we could not fund the British deficit.
We shall have to face that problem in the coming year. Our long-term interest rates are already above those of the Germans, even though our short-term rates are below theirs. The idea that we can enclose ourselves, when we are an open economy depending on movements of capital and trade, is false. That should be made clear to the British people. If we are to rebuild the British economy rapidly, as we hope will prove possible, we must also seek to rebuild the European economy.
It was for that reason that I intervened in the speech of the hon. Member for Copeland (Dr. Cunningham). Labour Members should not forget what the Chancellor was trying to do in the first few months of the British presidency. He was trying to get a common European approach to monetary policy, remembering that such an approach had been distorted during the last few months of our membership of the exchange rate mechanism by the fact that Germany was looking internally—I do not blame it for so doing—at the problems created by reunification.
There is nothing wrong with Germany looking internally, but it should be aware that the tensions created by reunification have resulted in monetary problems in other countries. If we respond through fiscal expansion, we must hope that Germany will examine its fiscal position as well. Help must be mutual, rather than competing with each other in monetary and fiscal policies.

Mr. Jonathan Evans: My hon. Friend says that we cannot view British monetary policy in isolation. Will he look again at Germany's position? Does not the same analogy apply there, particularly in the context of today's money supply figures for Germany, showing that the 5·5 per cent. target for M3 has been exceeded to such an extent that it is now 10·2 per cent., no doubt as a result of the factors to which my hon. Friend referred in respect of European monetary movements in the last few months?

Mr. Taylor: I appreciate my hon. Friend's comments, but regardless of what the Bundesbank is saying just now—it has as many arguments with the German Government as it has with other Governments—and regardless of the situation in Germany in relation to monetary policy, many east and west German Members of Parliament are concerned with the effect of the hard deutschmark on German industry within the European Community. A headline in a German newspaper proclaimed recently, "German industry worried about strong deutschmark." These are difficult times, even if what that newspaper proclaimed meant a competitive advantage for us.
As I keep stressing, the real problem in the European Community—a market of 340 million people with the free movement of capital, goods and services—is that there must be co-operation on monetary policy, so it is inevitable that we must have a policy towards managed exchange rates.

Mr. Hoon: The hon. Gentleman says that it is impossible to have a British monetary policy for our monetary conditions and I share his view, but was that not precisely the way in which the Chancellor of the Exchequer introduced the autumn statement'? The Chancellor said that a cornerstone of the autumn statement was a British

monetary policy for British monetary conditions. The hon. Gentleman voted for that last week. How does he reconcile his position?

Mr. Taylor: The Chancellor also said that he would have to set British interest rates while bearing in mind the position of sterling in relation to other currencies. So the hon. Gentleman is effectively agreeing with me, and I am agreeing with him. But we must make sure that the British people understand the interdependence in the Community. If not, they will want to take a very British position, and if the Government cannot deliver that position we shall face a credibility problem.
Another issue which has featured widely in our debates about the European Community is the 1992 programme. By 1 January 1993, that programme will be all but complete. Indeed, 95 per cent. of it is already complete. That represents a tremendous victory for Britain and we should shout it from the rooftops. It has not meant our taking a defensive stand against the European Community because of something being forced down our throats. We virtually invented the programme.
I pay tribute to the former Prime Minister, Lady Thatcher, who understood only too well that, if Britain was to open up the Community and remove restrictions, hidden and overt, to the free movement of people, goods and services, we needed a strong Commission to initiate legislation. It also meant that we needed qualified majority voting in the Council of Ministers, we had to make sure that no one country could block the efforts to open up the Community to the single market. Should she reflect on that, Lady Thatcher can remember with pride her efforts to push those measures through this House during our debates on the Single European Act.
It is essential for the British Government to make it clear that there will be times when it will be in Britain's interest to have a series of strong Community institutions. We would not wish there to be subsidiarity in the single market programme. If that were to happen, some preventionism and protectionism would re-emerge, particularly in France and Germany, in industries in which we have spent some years trying to break down such attitudes.
In terms of qualified majority voting and the single market programme, Britain has hardly ever been out-voted. Unless those points are properly explained, the British public will not understand why we have been in favour of strong European institutions. Nor will they understand why a valuable aspect of the Maastricht treaty is the fact that we are proposing to strengthen the powers of the European Court of Justice to make sure that member states which agree an action in the Council of Ministers do not then evade its implementation in their respective countries. The ability to fine is a cornerstone of that part of the Maastricht treaty. It strengthens a European Community institution, and it is in Britain's interest for that to happen.
A great triumph for the Prime Minister during Britain's presidency has been the progress to date in the GATT round, an issue of perhaps disproportionate importance to Britain because of our nature as a trading country. His determination has seen it through to the present stage. The Prime Minister has added strength because the European Community is negotiating as one. Once the European Council has asked the Commission to negotiate a common position in the GATT round and the Commission has


returned with a unanimous recommendation, it is possible for there to be qualified majority voting in the Council for the acceptance of the GATT position. That, of course, is precisely why the French are now looking at whether the Luxembourg compromise can be taken out and dusted off—rather embarrassing for President Mitterrand if he decided to go that far.
I shall not go too far down that track, as I do not want to affect the very delicate negotiations which may be going on between the British Government and the French Government. The point that I am making is that it is vital for the British people to know not only about the success of our British Prime Minister in getting this far on the GATT round, but that this is a case in which strong Community institutions work in Britain's favour. That is something that it would be well worth my right hon. Friend the Foreign Secretary, who I see is in his place, making clear in the run-up to the Edinburgh summit.
We must be quite self-confident about the European Community. It is not something that threatens us: it is something which, when we are confident, we can use to our advantage. If we say that with a great deal of pride, it is because we believe that it is to our advantage and therefore to the advantage of many other people within the Community; but they will know that only if we say it positively. That is why there are so many positive Europeans on this side of the House, certainly dominating the Chamber on this side of the House at the moment.
Another aspect of the Maastricht treaty which we should note is the creation, as an official institution, of the Court of Auditors. That, too, is a British initiative and, again, it establishes a strengthening of the institutions of the Community which will look after many of the aspects that have concerned people in this country. I notice that the massive bundle of papers, which the Foreign Secretary has rightly said is for the benefit of the House, despite its weight, contains a report from the Select Committee on European Legislation on the report of the Court of Auditors for 1990. There are several recommendations in that which lead to a strengthening of the position of the Court of Auditors.
There is a further point which I think is very important in the context of Britain's interests. We very much welcome those members of the European Free Trade Area which wish to apply for membership of the Community. It is in Britain's interest that they apply. The whole process of negotiation of the ratification of the European economic area leading on to the negotiations for full membership depends very much on Britain taking the lead. The process of negotiation is in danger of being delayed unless the House moves fairly rapidly forward through the process of ratification of the Maastricht treaty. Until we ratify, there will be great areas of uncertainty and I believe that that will delay the effective handling of the negotiations with those countries.
It is in our own interest that those countries join as soon as possible, because they will all be net contributors. A balance within the Community where there is a proponderance of net contributors will go a long way towards resolving the kind of debates that we shall have at Edinburgh and beyond on the Delors plans and other aspects of the Community budget. There will be greater self-interest within the Community in seeing how money is

spent and this will greatly assist the negotiating position of my right hon. Friend the Paymaster General, who is present on the Government Front Bench today.
A recent report by the Foreign and Commonwealth Office was reprinted in a document in the other place, which I cannot quote, but the indications there were that all the nations which were to apply—Austria, Finland, Iceland, Norway, Sweden and Switzerland—would be net contributors to the Community budget, particularly Sweden and Switzerland. This is quite an important tactical point, for a different reason.
The Danes are facing difficulties. The British Government have been very influential in trying to build bridges with Denmark, but when the Danish people consider their final position they will have to consider not only a Community with 11 members—I include Britain, because I hope that we shall proceed to Third Reading in this place by May, regardless of the Danish timetable—but a Community anxious to welcome other nations which surround it.
We, of course, would very much like Denmark to become positive about the Community. I am sure that we can deal with some of the Danes' worries and, in a legally binding form, tricky though that may be, with certain aspects of their worries about citizenship.
The reality is that the European Community needs to pull together: it needs to be stronger, and it needs to be stronger on a wider basis than the Twelve. If it is stronger and pulls together, it has a chance of coping more effectively with the economic problems which it faces at the moment. It is also in a much better position in a world which is increasingly uncertain and in which we shall be welcoming shortly a new American president who, however good he proves to be, is certainly, from some of the statements that he has made, a good deal more introverted in terms of policies than past Republican presidents have perhaps been.
This is a time for Europe to pull together and be strong; it is a time for the House to be positive about Europe; and it is a time to get on with ratification and remove one more uncertainty.

Mr. Barry Jones: I shall not follow the hon. Member for Esher (Mr. Taylor) except to reject the charge in his measured speech that there was unprincipled opposition on that now famous night. However, I agree with him about the objective of rebuilding the British economy and, to do that, the European economy.
I wish to speak on regional policy and industrial affairs. Frankly, my constituency and the surrounding sub-region will always need a regional policy, and so will Wales. Certainly Wales needed that £22 million RECHAR money recently allocated, at long last. To lose either assisted area status or access to Common Market structural funds would be disastrous. We appreciate the access to money from objective 2 status and the grants that accrue from development area status.
Since the Prime Minister took his high office, unemployment in Wales has risen by 35,000. Currently, my constituency has some 3,000 citizens unemployed and it has been worked out that the annual cost of keeping them unemployed and on the dole is some £27 million. For the 127,000 people in Wales who are unemployed, the


annual bill is more than £1·1 billion. Even worse, in some respects, over the past two years Wales has lost 18,000 precious, almost priceless, manufacturing jobs. There are 18 people seeking every job vacancy in Wales. On my own Deeside, nearly 800 citizens are long-term unemployed.
As part of my case for retaining objective 2 status and assisted area status, I would say that in north-east Wales we have seen the loss of 1,100 Brymbo Steelworks jobs, 240 British Steel jobs at Shotton; 270 British Aerospace jobs at Broughton; 240 cement jobs at Penyffordd; and 80 jobs at the Brother factory near Wrexham. Also, in my constituency, a large construction company, McFadden, has gone into receivership and some 300 jobs are involved. Nearby, on the coast, the famous Hotpoint factory is scheduled to close. The famous Laura Ashley factory near my constituency has closed, with the loss of 240 garment-making jobs. To sum up, we have lost far more jobs than the new manufacturing jobs that we have gained.
My constituency, the sub-region and the county need the retention of development area status. We want continued access to Common Market moneys under objective 2 operational programmes. We need the continued reclamation of derelict land and the building of a new River Dee crossing, financed, we hope, in part by Common Market funds. We want the Deeside industrial park to be extended by 400 acres, as proposed by the Welsh Development Agency and Alyn and Deeside district council. We need more industrial units, more commercial premises and a new access road into Deeside industrial park. We also want a more vigorous overall economic strategy.
If we are to implement a vigorous economic strategy, we shall need continued access to objective 2 status moneys and assisted area status. We need European money to electrify the railway from Holyhead to Crewe, to create work and to attract more inward investment to north Wales.
Fortunately, we have made progress after Europe's largest ever redundancy programme at Shotton steelworks, in which more than 8,000 steelworkers lost their jobs under British Steel between Christmas 1979 and Easter 1980. It caused much trauma and hardship in my constituency when the blow fell in 1980. Since then, my constituency has fought back hard, and several thousand new jobs have been established on the Deeside industrial park. We have attracted some inward investment against tough competition and now have companies such as Toyota, Sharp, Hoya, Brother and Optec. We are glad of that inward investment, but we cannot be complacent, as much remains to be done.
Touche Ross has made an analysis of my constituency and the whole sub-region and county. Its report highlights the fragility of the local economy. Our case for retaining assisted area status is that Clwyd is in the worst third in Great Britain for unemployment. Based on the 1991 census, unemployment in Clwyd is nearly 25 per cent. for men and approaching 40 per cent. for women. That position has been deteriorating in the past 18 months.
The reports also says that the structure of employment in Clwyd is weighted heavily towards an economic sector in decline. That is most prominent in manufacturing, on which the region is 39 per cent. more dependent than the average for Great Britain. The pattern of employment is uneven, with most manufacturing concentrated in the east of the county. The region has below average gross

domestic product per head when compared to the rest of the United Kingdom. Earnings are significantly below the national average and Clwyd has a small share of the country's senior, well-paid jobs.
Furthermore, new company formation is below the national average, although recent economic improvements resulting from a policy of pursuing inward investment have brought down unemployment. However, the jobs created have often been in low-wage, low-skilled assembly work and, thus, the local wealth creation that should have resulted from that activity has yet to materialise fully.
There are no higher education facilities in the immediate area. Rail communications remain poor and the region is distant from major markets and EC ports, a point that was made effectively by the hon. Member for Leominster (Mr. Temple-Morris).
The recent economic downturn has stalled and, in many cases, reversed earlier economic recovery. Unemployment in the county has risen sharply in the past two years. Recent Government policy decisions are not helping. My locality is threatened with the possible closure of the last remaining colliery in Clwyd, at Point of Ayr. If the closure goes ahead, it will mean 500 direct job losses and probably the additional loss of 1,000 local jobs. It would be wrong to close Point of Ayr colliery, which has done everything asked of it. I hope that the review will show its integrity by reprieving that colliery, among others.
We have suffered recent cuts in steel production by British Steel, which is still a major employer at Shotton. However, I warn the House that the steel industry in Europe is under massive pressure and that British Steel is in a serious predicament. A 20 per cent. cut in production has been imposed and only last week it announced losses in excess of £50 million. There is continued uncertainty over aircraft production, especially the executive jet at the British Aerospace factory in my constituency at Broughton. We need a regional policy, and we need to rebuild the British and Welsh economies.
The House may not know that, in the travel-to-work area of Aberdare, male unemployment stands at 19 per cent; in Bangor and Caernarfon in north Wales, it is 15 per cent; in Bridgend, it is 14 per cent; in Cardiff, it is 13 per cent; in Holyhead in Anglesey, it is a staggering 15 per cent; in Porthmadoc and Ffestiniog, it is 11 per cent; in Shotton, Flint and Rhyl—my travel-to-work area—it is 11 per cent; in the city of Swansea, it is 14 per cent; and in the town of Wrexham it is at 12 per cent.
Those figures are getting worse. I believe that the serious rise in unemployment throughout Wales is more than disturbing. It is an alarming development, as we see the loss of important manufacturing jobs, the steel industry under major pressure, and the coal industry on the brink of extinction. All the hard work and benefits of attracting inward investment are undermined when indigenous manufacturing jobs are swept away.
Wales must continue to have assisted area status grants. I warn the Government that they should not take away that hard-won status from the assisted area map of Wales. If they do, it will guarantee the loss of more manufacturing jobs. Wales should have continued and more access to European moneys. When we debate regional policy, it concerns the livelihood of communities and their future. There will be no future for manufacturing in Wales if the Government make the mistake of withdrawing one assisted area from the map.

Mr. Anthony Steen: I hope that the House will listen to the plea by the hon. Member for Alyn and Deeside (Mr. Jones) and to some of the crystal ball speeches, foreseeing what will happen, which have been made on both sides of the House in the past couple of hours. My speech will be much different and a little shorter, as I wish to concentrate on the rules and regulations emanating from the European Community which are helping to destroy more and more businesses in Britain,
Nearly 30,000 small businesses went to the wall in the first nine months of 1992–5,500 of them in the south west. That is an increase of 42 per cent. over last year in the south-west. My right hon. Friend the Foreign Secretary spoke, in his excellent opening speech, of the over-zealous application of European Community rules and regulations. As a result of regulations emanating mostly from Europe, industries in the south-west have the most depressed and pessimistic employment prospects in the country. Many of the businesses blame the excess of regulations for the increasing gloom.
It is easy for blue chip companies to lobby Strasbourg and Brussels, but the little man in the little firm is plagued by regulations and cannot lobby in the same way. I am sure that you, Mr. Deputy Speaker, are familiar with DG23. It is not a spy ring, but a unit in Brussels—part of the British Government's commitment to the Community—responsible for the fiche d'impact system. As the House will know, the fiche d'impact system is the European equivalent of compliance cost assessment in the Department of Trade and Industry—the deregulation unit.
Nobody quite knows what the fiche d'impact system is. I have tried to find out from the Library, where I was passed around half a dozen people who were not familiar with it. They could not tell me where it appeared in DG23, how many people worked in it, or how much it cost to run. Does my right hon. Friend the Paymaster General have more information on it than the House of Commons Library has? Is it larger than the deregulation unit? Is it better? Does it do a different job? Does every country in Europe have one? How is the impact of it on each country evaluated and by whom?
The House has a responsibility to know more about the system and to learn exactly what its officials in a Government Department does. It seems that, every time we pass a new regulation, it has an adverse effect on industries in Britain. I wonder whether the same is true in all other European countries. Are they all finding that every time a regulation is passed in Europe it helps to undermine and ultimately destroy their small firms? If that is so, DG23 is an odd institution, as it appears to agree to regulations which undermine the success of industry.
When my right hon. Friend the Paymaster General winds up the debate, will he see whether DG23 could contain a provision that a percentage of European money should be spent on re-examining, 12 months later, the directives that the fiche d'impact system has considered? We need a sort of monitoring process to see how effective or ineffective the European regulations have been on our industry.
Our officials have much to answer for in respect of the problems faced by many of our small firms. The general economy is blamed, but the problem is more the fault of

the regulations emanating from Europe. For example, new regulations have forced out of business many of the abattoirs in my constituency and those of other hon. Members in the south-west. One of my constituents told me that, as a result of an EC directive, he cannot buy a pork chop with the kidney in place. I do not know whether that is a myth or whether there is a new directive stating that a pork chop cannot be bought with a kidney in place.
Some butchers say that they cannot use ordinary sawdust on the floor, but have to use dust-free, flame-resistant and biodegradable sawdust. Doubtless it also has to be disease-free as a precaution against Dutch elm disease. Two independent small butchers in Devon have gone out of business. Some people will say that that is because of the economy, but the butchers say that they cannot afford, and are not prepared to cope with, the endless expense required to comply with EC directives from Brussels.
Another company complained about patent law. Before the European Community, legislation protected a product in this country for 20 years at a cost of about £5,000. A representative from a company called Kirby Devon said that there is now a European patent office, based in Munich. He said that the company now has to file a patent, costing £5,000—not just in Britain, but in every one of the European countries, at another £5,000 each. I cannot believe that that is true, but if it is, why are the fiche d'impact officials doing nothing about it, and why did they allow the legislation in the first place?
A representative from another of the companies in my constituency, 1st Class Roofing, has told me of the ever-increasing bureaucracy surrounding the disposal of rubbish. Apparently, there is so much paper in the new regulation that a new tip has had to be created to dispose of the paper produced by the regulation. A licence is required to carry rubbish, then tickets have to be purchased to dispose of the rubbish at tips, a ticket is given to the tip operator and a form is then printed in triplicate. All of that paper has to be disposed of, and new tips are being created to dispose of the paper emanating from the regulation.
A representative from a retail store with three retail outlets said that the annual cost of implementing the health and safety regulations was £55,000 a year, and that of implementing the building regulations, £30,000. The store wanted to provide a creche and was told that it had to subsidise it at a cost of £400 a week.
In addition, there is the Electricity Act 1989, the Environmental Protection Act 1990, hygiene regulations, and the Food Safety Act 1990. Ice cream manufacturers in Devon are being pursued by the water authority. Another retailer feels persecuted by the Government because of the mountain of statistical information required. The construction industry is overwhelmed by new regulations.
I know that my right hon. Friend the Paymaster General will probably say that not all the regulations emanate from Europe. He is probably right, but the regulations are being pursued with such vigour and enthusiasm by public sector officials and staff, not just in Westminster but in town and county halls throughout the country, that our industries are being damaged and their profitability is being destroyed. Will my right hon. Friend say something about that when he winds up? If nothing is done about it, the regulations will continue to destroy and undermine the profitability of our industries.
As I understand it, subsidiarity means taking the decision at the most appropriate level. If EC regulations affecting small businesses are not worked out correctly by the fiche d'impact staff in a manner sensitive to the needs of local communities, most of those regulations will continue to cripple firms. However, I am concerned that the regulations do not seem to have the same effect in other EC countries.
Why are we in Britain applying rules and regulations while Greece, Portugal and Spain—to mention just three countries—do not seem to be imposing the same regulations at the same speed? When I put that question to Ministers, they say that Britain must be the leader. It seems crazy for us to be the leader if it means that we destroy all our small firms, which the Conservative party is committed to supporting. It is crazy if, by putting into practice rules that the fiche d'impact officials in Brussels have not scrutinised carefully, we undermine our industry while Greece, Portugal and Spain carry on as though the regulations did not exist.
There should be a level playing field—to use a famous phrase—throughout Europe. Until the other countries in Europe put into practice the same regulations, whether good or bad and whether or not they have been through the fiche d'impact system, those rules should not be applied in Britain. Will my right hon. Friend the Paymaster General seriously consider the issue because I think that the House will agree that British enterprises should not suffer from regulations emanating from Brussels if other EC countries are not enforcing them?
In that way my right hon. Friend the Paymaster General could help the country out of recession. He could also ensure that council officials and the Government ease off and do not apply the rules and regulations so vigorously. The Foreign Secretary mentioned extra enthusiasm. I ask officials to exercise normal compliance so that we do not keep on punishing small firms, which have dreadful cash flow problems and cannot manage to invest more money, more man management or more training in the new rules and regulations which are constantly coming from Europe.
I said that I would keep my comments short. I think that I have made the best contribution I can in the time available.

Mr. Alex Salmond: I shall certainly follow the hon. Member for South Hams (Mr. Steen) in being brief. I want to speak specifically about one of the few working common policies in Europe, the common fisheries policy. To paraphrase Nye Bevan, because it is a working, existing policy we do not need a crystal ball to see what might happen; all we need to do is look at the book to see what has happened and what is happening.
Justice has not been done to the common fisheries policy or to the fishing industry through scrutiny by this House. A few weeks ago, rightly, we had a major debate about the future of 30,000 mining jobs throughout the United Kingdom. There are 30,000 jobs in Scotland alone dependent on the health and welfare of the fishing industry and not far off that number again in the rest of the United Kingdom.
Yet at a time when the common fisheries policy is undergoing substantial fundamental review, or perhaps even replacement—we cannot be sure because the relevant

document refers to it being reviewed, replaced and amended—there has been no debate about it in the House. Major changes are being made to take forward the policy for the next 10 years, but we had to wait 10 months for the matter to be examined by the Select Committee on European Legislation. We have had no debate on the Floor of the House about the fundamental review of one of the few working common policies within the Euorpean Community. It does the House no credit that the fishing industry should be dealt with like that.
When final decisions are made, as is likely to happen at the Fisheries Council in December, the best that hon. Members from fishing constituencies can expect in the House is a brief debate immediately before the Ministers go to Brussels when, in all likelihood, decisions have already been made and we will be debating in effect a fait accompli. That is the inadequate scrutiny which the House currently gives to a major European policy which is under fundamental review.
Like many hon. Members, I am looking forward to the European summit in Edinburgh. If I interpreted correctly the world-weary speech of the Foreign Secretary, what happens outside the conference chamber may be as exciting as, if not more so than, what happens inside. I am sure that the people of Scotland will take the opportunity to display to the heads of state and the European visitors who come to our capital city the fact that the vast majority of them do not wish to tolerate a situation where fundamental decisions affecting the future of the entire continent can be made in the capital city of Scotland without the Scottish people having any direct access to the conference chamber or proper representations of their views and ideas about the future of the continent.
Among the many demonstrations, the mini-summits, the youth summits and various activities which are planned, there will be a major demonstration by the fishing community. It will be demonstrating its concerns about the review of the common fisheries policy and its opposition to the Sea Fish (Conservation) Bill which is going through Parliament. Thankfully, I understand that the other place amended that measure substantially this evening. In particular, there will be a major demonstration at the inaction of Fisheries Ministers, who, by their dereliction of duty in Brussels last evening, condemned Scottish fishing communities to another five weeks of anxiety and dislocation.
Looking round the Chamber, I can see only one fisheries Member, the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). The hon. Member for Greenock and Port Glasgow (Dr. Godman), who is also present, is a substantial friend of the fishing industry. Let me explain, therefore, to hon. Members what is happening within the common fisheries policy.
In Scotland the haddock quota is exhausted and no haddock is allowed legally to be landed until the end of the year. Hon. Members may say, "That is fair enough; there must be a problem with the stock and the limitation on fishing is essential for conservation." That is not the case, The seas round Scotland are teeming with haddock. That is not just because the fishermen are catching them and discarding them dead in thousands of tonnes into the North sea, because once a fish is caught it cannot be released alive into the sea. The fishermen are not allowed to land the fish. It is also because in, their evidence to the next Fisheries Council, scientists will propose a doubling of the haddock quota in the North sea next year.
We had an amusing debate last week in the European Standing Committee about Hogmanay haddock. For the benefit of hon. Members, I will explain. These are haddock which, according to the official explanation, do not exist; they cannot exist because the quota system says that they do not exist, but miraculously they will materialise on 1 January when the quota will be doubled and we will be moving from a shortage to a glut. Common sense tells us that these will be the self-same haddock, but to fulfil the requirements of the quota policy, the fishermen are not allowed legally to land the haddock at present. Therefore, thousands of jobs in the fishing industry in Scotland will be subject to dislocation over the next five weeks and there will be a very bleak Christmas for many families in the fishing communities.

Dr. Godman: May I point out to the hon. Gentleman that many of my constituents believe that it is a heinous sin to discard the fish and that it is much better to sell them on the black market, even if that is illegal under European Community rules?

Mr. Salmond: It would be extremely difficult to argue that the discarding of fish dead into the North sea represents any sort of a conservation policy.
The burden of my remarks is to suggest a solution to the problem. The Foreign Secretary told us about Euromyths. He has even published a booklet to help hon. Members to understand that many of the things we hear about the European Community are not the fault of the Community but myths spread in the press and elsewhere which bring the Community into disrepute. I suggest that it is not the Euro-myths which bring the Community into disrepute but the actions and inactions of United Kingdom Ministers who fail to pursue proper negotiations within the European Community.
What should have been proposed to the Fisheries Council yesterday by the two Ministers representing the United Kingdom was a simple mechanism of borrowing forward on next year's haddock quota to solve the immediate problem and not jeopardise the long-term stability of the industry. There was precedent for such a proposal because other countries have used that exigency in the past. A vital national interest was at stake, certainly for Scotland. It is not just that 78 per cent. of the haddock caught in the North sea are part of the United Kingdom quota; the important point is that no other member state has the same vested interest in the haddock quota as the United Kingdom, and particularly Scotland. Therefore, no one had a vested interest in stopping an adjustment of the quota.
Within the Commission documents proposing the review of the fisheries policy there is a move away from annual quotas to multi-annual quotas. Therefore, there would not even have been a damaging precedent set for annual quotas, because they will disappear under the proposals of the Commission.
It would have been bad enough if Fisheries Ministers, with that wealth of argument at their disposal, had come back and told the House that they had tried but failed, but the reality of what happened in Brussels yesterday is that the issue was not even placed on the agenda by the Scottish Fisheries Minister representing the United Kingdom in negotiations. Therefore, I hope that hon. Members will

understand the present anger in fishing communities in Scotland at the total dereliction of duty by the Scottish Fisheries Minister, the Under-Secretary of State for Scotland.
May I now generalise from the particular. What does that example of the confusion and chaos in fisheries policy tell us? Is it a result of the common fisheries policy itself or a result of the negotiators from the United Kingdom not having enough interest in the subject to secure the common-sense solution that was available for the fishing communities? Is it an example of where subsidiarity might have applied?
There is more than enough reason to believe that the Scottish Fisheries Minister is a nice man, but has no power because he is overruled by his ministerial superior in the Ministry of Agriculture, Fisheries and Food. Certainly it is an example of where there would have been a different outcome if Scotland were an independent state within the Community. No genuine Scottish Fisheries Minister could have survived in post after having so signally failed to raise an issue of such importance at the relevant Council meeting.
I was somewhat stung earlier by the Foreign Secretary telling me that I have an old-fashioned view of the EC. I think that I have a modern view of the EC. I may have an old-fashioned view of politics. I think that Scottish Office Ministers should try to defend the interests of the industries for which they are responsible. I was stung because I cannot think of an hon. Member who is more Edwardian in his approach to politics than the Foreign Secretary. If ever there was an hon. Member who was born after his time, it is the Foreign Secretary.
The Foreign Secretary, in that way of his, waved his hand and told us to consult the documents supplied to the House and the principle of subsidiarity from the Commission. Many of us have consulted just those documents to find the following description;
This common sense principle therefore dictates that decisions should be taken at the level closest to the ordinary citizen and that action taken by the upper echelons of the body politic should be limited.
It goes on to say that the first application of that political principle of subsidiarity is in many cases within the states of the EC itself.
The essential hypocrisy of the Government's attitude to subsidiarity is that they believe that the principle can be applied to the relationship between the United Kingdom and our European partners without the same principle being applied within the United Kingdom. On that point of hypocrisy, I suspect that the Foreign Secretary, come the Edinburgh summit, may find that it is not "Scotch on the Rocks" but a Prime Minister and Foreign Secretary on the rocks.

Mrs. Edwina Currie: First, I add my congratulations to those of a number of hon. Members on the Government's success in the GATT agreement. More than anything else that we might do at the moment, the successful conclusion of those five years of negotiation, involving 108 countries and 28 different agreements, will do more for world trade and prosperity than almost anything else that we might do. If that is the only success of our six months' presidency of the EC, it is a substantial success, and one to which we shall look back in time to come with much gratitude.
I also join my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn), who has clearly found something else to do at 8 o'clock in the evening, in his protest about the papers. Every hon. Member who has gone to the Vote Office to collect that great heap that is now sitting on the Table has grimaced at seeing it.However, anyone who has ever seen the monthly papers that come out of Derbyshire county council would not be in the least surprised at that quantity of paper, bearing in mind that, for every person employed by the European Commission on any of its budgets, Derbyshire county council employs two in Matlock, and very few of us can see exactly what they get up to.
A great deal of that paper has been around for a very long time, and much of it was written in London. The most incomprehensible chunk of all was written in Her Majesty's Treasury. The explanatory memorandum on the transfer of administrative appropriations says:
Attached to the paper are a number of annexes covering a breakdown of outside (non-statutory) staff; the criteria for converting appropriations to posts (and for the continued use of outside staff); the technical procedures to be used to incorporate administrative appropriations from Part B into Part A of the budget; and criteria for distinguishing between appropriations for studies, consultants, meetings, conferences, information and publications, which are to be transferred to Part A, and those likely to remain in Part B of the Commission's Budget.
This is an explanatory memorandum. The subject is transparency of management. If that is an explanatory memorandum, it is no good. Most of the other stuff produced by the Treasury is in the same form. The explanatory memoranda produced by the Foreign and Commonwealth Office are much better and clearer and I commend their style to my colleagues in the Exchequer. Such documents appear to be written by someone with English as his third language.

Mr. Ian Taylor: Will my hon. Friend help the House by reading that for the record in the other Community languages, in which I am sure it will sound much better?

Mrs. Currie: I would like to bet that it is comprehensible in French, but it is not comprehensible in English, and it should be. If we are to be presented with explanatory memoranda to assist us in debating these important matters, I hope that they will be much clearer in future.
Those hon. Members, particularly Conservative Members, who have said that we should face our future in Europe with resolute, determined and positive attitudes are right. We should see the challenges that face us not as unpleasant or unacceptable, although they are difficult, but as opportunities. We should ensure that we in the United Kingdom benefit by taking advantage of those opportunities, particularly on trade.
I speak from a strong position in south Derbyshire, because the Toyota factory will soon be starting production in my constituency. It is a remarkable achievement to open a new factory so fast and with a brand new model, the Carina E—E for Europe—a redesigned model intended for the European market. That is a tremendous credit to all concerned.
Toyota is here because we are in Europe. It would not be in the United Kingdom if we were not an active and full member of the Community. It is here because, within the Community, the United Kingdom presents the most attractive business environment, with our low taxation

policy, few restrictions on business and our refusal to accept the social charter. We are very much at the heart of Europe.

Ms. Joyce Quin: Has the hon. Lady seen the recent report by Ernst and Young, which says that there are some worries among would-be investors in the United Kingdom because we now seem somewhat semi-detached from the rest of Europe, and because of the double opt-out in Maastricht there is a question mark over investment? As my hon. Friend the Member for Copeland (Dr. Cunningham) said earlier, investment has dropped.

Mrs. Currie: Worries about the United Kingdom becoming semi-detached or being in any way half-hearted are a reflection of small majorities in the House. If the hon. Lady and her hon. Friends feel that way, they should be voting with us on every aspect of the European Communities (Amendment) Bill and ensuring that we have the thumping big majorities that we had on Second Reading which this country needs.
Toyota is in the United Kingdom not only because we are in Europe but because of the British approach to international business which has made such companies more welcome, unlike the French, who have spoken in hostile terms about the Japanese, and unlike the trade unions, who have called their practices alien, a comment which rankles, and which continues to hurt them.
We fought for Toyota's cars to be accepted as British and European. When I say "we", I mean that I fought for them. I went to Strasbourg. Our European Member of Parliament, the hon. Member for Stoke-on-Trent, South (Mr. Stevenson), who is not in the House at the moment —goodness knows where he has got to—did not fight for them. The Labour Member of the European Parliament who sits for Dagenham was responsible for the proposal that Japanese vehicles built in this country would have counted as Japanese and as imports. I was pleased that I was able to go, and that we were able to have that policy thrown out.
Such action is part and parcel of meeting the challenges and of welcoming outside stimuli to this country—rather that than sit on our backsides and moan about the difficulties. Most of all, as a nation we must get out and sell not only our products but ourselves and our communities.
There are huge benefits in adopting that attitude Toyota now employs 1,000 people in my constituency, the unemployment rate in which was 6·7 per cent. in October and falling. Of the 10 Derbyshire constituencies., unemployment is falling in six and static in three. Unemployment is rising only in the constituency of the hon. Member for Bolsover (Mr. Skinner). The fastest fall in unemployment last month was in the constituency of the hon. Member for Derby, South (Mrs. Beckett)—but you would not hear her say that.
That improvement is partly due to the impact not only of Toyota but of other locally based international businesses such as Nestlé, Pirelli, Asea Brown Boveri, Stanton—which is now owned by St. Gobain—and GeGa Lotz, a German company. Unemployment has also fallen nearby in Burton-on-Trent and north-west Leicestershire.
Derbyshire could have retained—as several hon. Members suggested—the dominance of old, nationalised, subsidised and protected industries. It could have begged for subsidies, but it never has done so. South Derbyshire does not receive subsidies, enjoy special status, or get


grants. We do not want grants, believing that draws attention to problems rather than to the opportunities for inward investors and business people.
Derbyshire chose instead to cultivate international businesses as the motor heart of Europe, and it did so. I will not mislead the House—the transition was painful, but very worthwhile, and I commend it. I would like to see the same positive attitude pervade the rest of our great trading nation—and that must start with the Government. If they are concerned about the negative tone of some of their supporters—a tiny minority in the House—they must consider whether they have only themselves to blame.
Every time that Maastricht or some other European policy is presented in a negative way, a few more decide against it. If we talk about subsidiarity not as an essential clarification and strengthening of the relationships between nations and central organisations but in negative terms—as "restricting the powers of faceless bureaucrats" or "the centralising tendencies of the Brussels machine"—which is the phrase used by my right hon. Friend the Secretary of State—the Government should not be surprised if a few of my right hon. and hon. Friends say, "We hear you, John. We are with you, Douglas. We will vote against the lot."
If every effort to bring down invisible trade barriers is portrayed as Brussels bureaucrats interfering in the noise emitted by lawnmowers or motor bikes, of course some commentators will think that the whole thing is a pettifogging waste of time. Lawnmowers are made in my area, and we needed to bring down those invisible trade barriers. I regard it as insulting that that aspect—which resulted in a success in enabling and improving trade for this country—appeared in the Foreign Office booklet "Euromyths". I received an apology, but I hope that reference will be removed in the next edition and that it will instead concentrate on successes.
I am proud to be a founder member of a group of Conservative Back Benchers who are positive Europeans, and who numbered 75 at the count yesterday. We outnumber the sceptics two to one, and are otherwise known as "Whitney's wonders" after my hon. Friend the Member for Wycombe (Mr. Whitney), who is not in his place at the moment, and who yesterday was elected as our chairman. I pay tribute to him and to my hon. Friend the Member for Esher (Mr. Taylor) for calling that group together.
We urge the Government to get on with the Maastricht Bill and to secure its Third Reading as soon as possible—certainly by May—and not link it to whatever goes on in Denmark or anywhere else.
Why should this proud nation hide behind any other country? Why should our country even dream of being the last in Europe to ratify the Maastricht treaty—particularly when the treaty that we are now debating and discussing is different from, and better than, that achieved by other nations—who are jolly envious.
I urge the Government to be altogether more positive about Europe from here on in. If I may phrase this in the double negative style that seems to float around Front Benches, I beg the Government not to forget that they should not get so bogged down in the detail that they ignore the necessity of explaining to the British people and the House the broad thrust of what they are trying to

achieve and their objectives. With all the talk of budgetary discipline, auditors, subsidiarity and the rest, we are trying to build a Europe that is strong, competent, and free.
I urge the Government not to get so hung up on the problems that currently face the Community that they fail to promote and to draw attention to the Community's hugely beneficial benefits, of which my constituency has concrete evidence right now. Those benefits are the fruits of previous changes fought through the House, such as the Single European Act, which in retrospect were enormously helpful. The results that they brought in my own area are leading to growth and prosperity—the like of which we have never seen. I commend those thoughts to the House.

Mr. Geoffrey Hoon: It is one of those nice ironies of parliamentary life that I follow the hon. Member for Derbyshire, South (Mrs. Currie), because in due course I shall be leaving the European Parliament to concentrate on my work in the House, whereas I understand that the hon. Lady is about to abandon her constituents for the prospect of a seat in the European Parliament.

Mrs. Edwina Currie: I am going the right way.

Mr. Hoon: The hon. Lady will at least be able to fight for her constituents, wherever they may be, from the Floor of the European Parliament—rather than from its gallery, where she did her fighting on behalf of Toyota. In any event, I wish the hon. Lady every success in her efforts to secure a candidature, but I warn her that the present opinion polls do not look particularly favourable for Conservative candidates for the European elections in 1994.
Rarely has any presidency of the European Community been subject to so much criticism as that of the present British leadership. Usually, disappointment with the performance of any country's presidency is expressed only at the end of the six-month term of office—and then only in muted diplomatic niceties about the numbers of directives passed or agreements reached. Sadly, we have open, clear, and condign criticism of the British Government's handling of a series of Community issues.
Central to those issues are the related budgetary and financial questions which are the essential subject matter of today's debate. The Government consistently criticise the way in which the Community spends its income, so it was not unreasonable to expect during the British presidency evidence from the Government that they are sorting out the interlocking difficulties currently on the agenda of the Community's Finance Ministers.
The 1993 Community budget appears to be heading for considerable difficulty because of the wide gap between the Council's position—after the ruthless cuts in the Commission's draft budget, in which the British Government lead the way—and that evident in amendments tabled by the European Parliament. Many analysts suggest that that will lead to the budget being rejected, the collapse of the budgetary process and further difficulty for the United Kingdom presidency.
Other issues include continuing discussion about the Delors 2 package, particularly in the light of its recent revision by the Commission, and negotiations for a new inter-institutional agreement to replace that which lapses at the end of this year.
I shall deal first with the 1993 budget. It is not clear whether the British Government have accepted the arguments in favour of a real strategy for European growth backed by funds from the European Community budget. If the British Government endorsed such a strategy, that must have been received by European Finance Ministers with a mixture of amusement and incredulity as those same Finance Ministers have heard British Governments consistently oppose and even refuse to discuss plans for employment and economic growth throughout the European Community. We understand that until recently the British Government even opposed the idea of economic growth being a separate item on the agenda for the Edinburgh summit.
Perhaps we are right to remain cautious about the prospects of some blinding conversion on the road to Brussels for our Government. After all, during consideration of the 1993 draft Community budget, the British Government led the Council of Ministers into a series of deep cuts in expenditure on the very programmes which could form the core of any European package for recovery and growth.
The British Government have cut at least £2·8 billion from the total budget set out by the European Commission. It is interesting to measure what has been reported about the Government's so-called commitment to European economic recovery against the individual items in the draft budget which they and their colleagues in the Council of Ministers have cut. The Government have cut £240 million from regional and social spending. Previously, under a series of different presidencies, regional and social spending was generally left untouched. The Government, however, think it appropriate to cut £240 million off the Community's budget for regional and social spending.
The Government have cut £320 million off the Commission's figures for research spending at a time when almost everyone accepts the importance of further research to enable European industry to be truly competitive, especially in relation to far eastern countries. If we are to be competitive in new technology and electronics, we need the research spending that has been cut by the Council of Ministers.
A further £160 million has been cut from a series of projects covering education and training, environment policy and consumer protection, all of which are vital to the continuing health of the European economy.
I shall make a comment about one other area of council cuts in the light of the Foreign Secretary's opening statement. He waxed rather lyrical about the need for openness in the European Community. He spoke about the need for information about Europe and for the people of Europe to understand the European process. Unfortunately, his remarks about openness and information must be measured against the determination of his Government to preside over a cut of almost 50 per cent. in the European Commission's information budget. That is hardly an appropriate way to ensure that the people of Europe become more informed about the processes of the European Community.
The Council of Ministers has slashed the proposed cohesion fund from £1·25 billion to zero. That money was aimed precisely at the growth and convergence which the Government say that the Community neeeds. The money was promised as the price of agreement over Maastricht. It is compensation for the poorer outlying areas of the

European Community and the centralising tendency of Maastricht. Of course, the money is an essential part of the Delors 2 package which has been revised by the European Commission.

Mr. Milligan: The hon. Gentleman is complaining about the cohesion fund. Is he aware that the cohesion fund cannot be set up until the Maastricht treaty is ratified because it is part of the treaty? If he wants to see the fund set up, the best way to do that is to persuade his Front Bench to give full support to the ratification of the Maastricht treaty.

Mr. Hoon: I am grateful for that observation. I anticipate that the position of the Labour party on the constitutional process of ratifying the Maastricht treaty will remain very much what it was on Second Reading. We shall not be diverted in the way in which the Government want us to be diverted—along paths established solely for the benefit of the Conservative party to paper over the deep cracks that have emerged in that party.
We want to see a cohesion fund as part of the Maastricht agreement. Clearly, we also want to see a policy for the European Community which emphasises not just centralisation but the contribution that can be made to the Community by all of the countries working together equally. That is why we have considerable sympathy for the Delors 2 package, which is the second subject that the Government must address.
What is the Government's position now, in the light of the revision of the Delors 2 package which has been agreed by the European Commission? The Government have wanted consistently to provide a longer-term perspective for European Community financing. The reaction that the Commission have consistently had from the Government is scorn. The Government have consistently rubbished the efforts of the European Commission to put the enlargement of the Community into perspective and provide assistance to eastern Europe at a time when they are saying that economic development in eastern Europe and enlargement of the European Community would be a good thing. Yet when the Government are faced with proposals to implement those principles, they suddenly find that they cannot go along with them.
So there is a matter on which it would be possible for the Government, leading the European Community in the way the hon. Member for Derbyshire, South advocated, to put into practice the leadership of Europe that is so vital. It is necessary to have extra money to enable countries to develop and to enable areas which have only recently been released from totalitarian Governments to develop economies of the sort which I assume that the hon. Member for Derbyshire, South wants to see. Extra funds can be made available only if there is a commitment by countries such as the United Kingdom and other countries in the European Community.
The European Commission has backed down considerably in its original programme for the cohesion fund. It backed down in a way which is, frankly, unlikely to find favour with the European Parliament. The European Parliament has stressed the need for a substantial increase in that part of the Community budget which is available for eastern Europe and development. It has also stressed the importance of making more of the present Community budget available for internal policies. It remains to be seen whether the Commission's revision of the cohesion fund


will find favour with the European Parliament. That is where the Council and the British Government need to direct their arguments in the budgetary process. They need to find an agreement which will satisfy the European Parliament.
The Council and the British Government must satisfy the European Parliament with a new inter-institutional agreement. The 1988 guidelines lapse at the end of 1992, at the end of the British presidency. Therefore, it would have been sensible, and one could have expected the British presidency to be well under way in the process of reaching a new inter-institutional agreement for 1993 and the years beyond. Sadly, however, that appears to be far from the case. The negotiations involving the Council, the Commission and the Parliament seem to have made modest progress to date. There is a meeting tomorrow between the Council and members of the parliamentary budget committee, but no one is confident that any real agreement will result from the meeting or, indeed, that any agreement will be reached before the end of the financial year.
A new inter-institutional agreement is a priority for the Commission and the European Parliament. It remains to be seen whether a new agreement is a real priority for the Council. Without a commitment to the Delors 2 package as part of the arrangement, an agreement is unlikely to find favour with either the European Commission or the European Parliament.
The package must involve measures to improve the industrial competitiveness of the European Community. As the Foreign Secretary said earlier, it must involve the development of trans-European networks in transport, telecommunications and energy. However, those policies need funding to make them work. So far, the Government have been strong on saying that the ideas are good but extraordinarily weak on putting into place the financial support which could make them happen.
Those are precisely the areas which have been hit hardest by the Council's revision of the Commission's draft budget for 1993. It is extraordinarily difficult to take seriously the suggestion by Conservative Members that the present Government are deeply committed to the European Community; given an opportunity to demonstrate that commitment in the context of the 1993 budget debate, the Government ducked the responsibility.
I want to see real leadership from the British Government in relation to the financial and budgetary difficulties faced by the Community. They could use their presidency to sort out clearly, on behalf of the Council, problems whose solution would gain them widespread support across the Community. I suggest a modest package of measures which would go a long way towards resolving the three main areas of difficulty.
First, there should be an agreement on the cohesion fund, and a doubling of the structural funds, to provide employment and training across the Community. Secondly, there should be a restructuring programme to take account of the employment consequences of cuts in defence spending. Thirdly, there should be a programme to ensure improvements in vocational training across the Community. Finally, there should be a commitment to the Community's responsibility to the countries of eastern

Europe—and, indeed, those of the developing world—at the level suggested by the Commission in its draft 1993 budget.
If the Government have the courage and conviction to adopt such a straightforward and sensible package, their present difficulties within the Community will disappear. The package would appeal to the European Parliament and would lead to a swift settlement of any difficulties remaining over the 1993 budget; it would endorse the main elements of the Delors 2 package; and it would set in place the building blocks for a new inter-institutional agreement. That would be a real achievement for the British presidency in its six months.

Mr. Stephen Milligan: By and large, Opposition Members' speeches have been couched in constituency terms, and that of the hon. Member for Ashfield (Mr. Hoon) was no exception. They have contained pleas for more help for steel, shipbuilding, fisheries or regions. Taken together, however, they carry a clear message—that there should be higher public spending and higher borrowing. I do not believe that that would work in Europe, for the same reason that it would not work in this country: it would mean higher taxation and higher interest rates. Such an approach is not the best way in which to create jobs; it is the best way in which to stop recovery in its tracks.
The hon. Member for Copeland (Dr. Cunningham) heaped on the Government much abuse for what he said that they had failed to do during the British presidency. He said, for example, that they had failed to deal with the problem of unemployment. It is a bit rich to hold the British presidency responsible for rising unemployment across Europe. The hon. Gentleman does not seem to have noticed that unemployment is also rising in Japan, the United States and, indeed, every industrialised country in the world.
Perhaps the hon. Gentleman has forgotten what happened under the last Labour presidency of the Community, which I had the misfortune to witness as a journalist in Brussels. It is difficult to remember a time when this country was more unpopular in Europe. Hon. Members may recall the time in the 1970s when a Labour Government opposed direct elections to the European Parliament, and opposed not just our joining the European monetary system but the very creation of that system. Then, Labour was opposed to a common energy policy—and, of course, it faced economic catastrophe at home. I do not think that comparisons based on presidential success befit Labour Members.
I believe that today we have some reason to be proud of our achievements in Europe, if we consider those achievements over a longer period. When we joined the European Community, we joined a Community which was primarily agricultural, paying very high prices to prop up French and German farmers. We joined paying a wholly disproportionate amount into the European budget. Now, that Community is slowly but surely changing: in the six months of the British presidency, a number of significant alterations have been made.
First, there has been a change in the budget. Under the leadership of my noble Friend Baroness Thatcher, we made significant reductions in the British contribution, amounting to £14 billion over the period concerned. I


consider it vital that the British abatement is maintained, but I also think it important for us to resist excessive public spending of the kind proposed in the Delors 2 package. Someone must pay for it: it is not a free ride.
It is significant that, when British Ministers talk of excessive spending, waste and fraud in the Community, they now have allies—most notably the Germans. I was surprised to hear the hon. Member for Ross and Cromarty (Mr. Kennedy) say, when challenged on who should pay more towards regional spending, that he thought that Britain was not paying enough into the European budget.

Mr. Kennedy: rose—

Mr. Milligan: Perhaps the hon. Gentleman would like to explain.

Mr. Kennedy: On a point of fact, I am the Member of Parliament for Ross, Cromarty and Skye; but let us leave aside that particular principle of additionality. I was merely making the point that, when it comes to nation state contributions, this country has constantly abused the principle of additionality by replacing projects that would otherwise have gone ahead, and making them additional in the eyes of the Commission. I was criticising the way in which the system has been operated by the Treasury, both historically and currently.

Mr. Milligan: I am delighted to hear that clarification. I take it that the hon. Gentleman thinks that we are not paying enough, and also thinks that we should reduce the amount that we pay to the Community budget!
Incidentally, it is an unhappy fact that our gross national product is now below 90 per cent. of the Community average, which will make us eligible for payments under the cohesion fund if the Maastricht treaty goes through. I hope that Ministers will not be too timid in applying the fund. It may be embarrassing that our GNP is below 90 per cent. of the average, but, if there is money for Britain, I hope that we shall put in for it.
Secondly, there has been reform of the common agricultural policy. We have made great strides in the past few years, mainly because of the freeze in prices, the introduction of quotas and the reduction of agricultural output; but I believe that the GATT agreement will constitute a decisive step towards CAP reform.
Then there is enlargement. We are now quite close to an agreement to admit Austria, Sweden and Finland, and —I hope—eastern European countries soon after that. The sooner that we ratify the Maastricht treaty in the House, the sooner we can begin enlargement negotiations. As the first three countries to join will be net contributors to the budget, this country has a direct financial interest in their joining as soon as possible—which is a further reason for our ratifying sooner rather than later.
The concept of the single market is very much a British concept, to which Lord Cockfield contributed in particular. It is about to become a reality in January.
Finally, there is subsidiarity—a new idea, developed over the past 18 months, which is very much in harmony with the traditional British idea of trying to reduce the influence of bureaucrats and to decentralise the Community.
I believe that subsidiarity is the key to why the Maastricht treaty should be ratified. Many hon. Members have asked what it actually means: is it legally enforceable? There are some doubts about whether a few paragraphs in

the treaty are clear. If hon. Members want to understand what subsidiarity really means, they should go to Brussels, and visit the Commission and the various delegations—as I did a couple of months ago with my hon. Friend the Member for City of Chester (Mr. Brandreth). They will be amazed at the change in attitude among national delegations. It is no longer just the British, the Danes and the French who are canvassing for subsidiarity; the Germans are doing the same. As my right hon. Friend the Foreign Secretary pointed out, Chancellor Kohl has now strongly embraced the concept, and is actively campaigning in favour of it.
If hon. Members visit the Commission building, they will find that the number of propositions for Community law has been reduced by two thirds. I pay tribute to Jacques Delors. I know that that may seem heresy to some of my hon. Friends—

Mr. Whitney: They have all gone to dinner.

Mr. Milligan: I am happy to hear it.
In the past 12 months, Mr. Delors has radically changed the Commission's approach, and has demanded that every proposal that comes to his desk should have a piece of paper attached to it explaining why the proposal should be dealt with at European rather than national level. That is one reason why the number of proposals has dramatically declined.
Mr. Delors has also made one decision that my constituents particularly appreciate. Hon. Members may remember the dispute about the completion of the M3 at Twyford down, and the Commission's suggestion that it knew better than the British Government which side of St. Catherine's hill the motorway should go. I accept that the Commission and the Council have a right to interfere in environment policy if we are producing acid rain by pumping sulphur dioxide into our atmosphere, but it is absurd for the Community to try to decide matters such as the route for the M3. I pay tribute to Mr. Delors for withdrawing the Commission's intervention, in the new spirit of subsidiarity.
I hope that we shall make further progress on subsidiarity at the Edinburgh summit—that we shall put flesh on the bones. In particular, I hope that there will be a hit list of directives that are to be repealed. I hope, too, that there will be a new Council procedure to enable people to blow the whistle on an unnecessary directive a t any point in the discussions and that there will be a clearer definition of how subsidiarity might apply.
Niggling regulations are, I believe, irritating our constituents. Most people in this country accept that, when we are dealing with a problem such as Yugoslavia or currency movements it is right to do so on a European scale, but they cannot accept niggling intervention in what my right hon. Friend the Home Secretary called the nooks and crannies of public life. If we cannot put flesh on the bones of subsidiarity, it will make an enormous difference to public opinion.
We must be careful, however, not to take the principle of subsidiarity too far. Britain has an interest in interference in certain areas. If money spent by the Community is wasted, or it olive tree growers in Italy indulge in fraud, we want Commission officials to interfere. If there is protectionism inside the internal market, with the result that the French or the Greeks are


keeping British goods out of their countries for no good reason, we want the Commission to interfere. Subsidiarity, therefore, need to be defined carefully.
The best definition of subsidiarity is that the Community should take action when problems of great significance cross national borders. Recently, the Government put forward a proposition to harmonise the rules on the vaccination of racing pigeons. One has to admit that racing pigeons cross borders, but it is not a significant issue. Although there may be issues on which it is thought that action is needed, there is no common Community interest there.

Mrs. Currie: I understand that in some parts of the country that lie further north than my hon. Friend's constituency, the export of first-class racing pigeons is an important trade.

Mr. Milligan: I defer to my hon. Friend's great knowledge and I appreciate that what she says is correct, but I believe that exports could continue without there having to be common rules on the vaccination of racing pigeons.
My hon. Friend referred earlier to lawnmowers. That is a very good example of what I mean. When I worked as a journalist in Brussels, there was a story that the Commission was trying to harmonise the noise made by lawnmowers. Everybody roared with laughter and said, "What could be more absurd? This is a parody and amounts to unnecessary Commission interference."
Three weeks later I had to write an aritcle about barriers to British exports. I telephoned the Confederation of British Industry and said, "Can you give me a practical example of a barrier to British exports on which the Community ought to be taking action?" The reply was, "Yes, lawnmowers. The rules in Germany are so designed that noise can be emitted only by German-made lawnmowers. If we are ever to sell British lawnmowers in Germany, we need to harmonise the rules." Absurd rules can be of no practical advantage to this country. We need to define subsidiarity carefully so that we do not prevent the making of rules and regulations that would greatly benefit this country.
The Edinburgh summit will have a heavy agenda. It will be an enormous success if it can get through half the agenda. Subsidiarity is the key to success. If we can reach agreement on subsidiarity, the British presidency will end not with a whimper but with a triumph.

Ms. Joyce Quin: Having listened to the debate, I am more than ever convinced that the dilemma for the Government in their European policy is that they are unable to obtain the agreement of their supporters on whether Britain should be at the heart of Europe, or whether we should have some kind of special semi-detached status on the periphery of Europe. The dilemma hampers the Government at every stage. It will continue seriously to weaken our position within the European Community for the foreseeable future.
The single market, to which the Foreign Secretary referred when he opened the debate, is a good example of the Government's illogicality and inconsistency. They claim to be enthusiastic about the creation of the single

European market and about the need for a level playing field within it. However, the single market is about four freedoms: freedom of movement of goods, services, capital and people. The Government seem to believe in a level playing field for the first three freedoms but not in a level playing field for the fourth freedom—people and their working conditions.
The Government's position on the social charter and the opt-out from the social chapter undermines their wish to create a level playing field in other areas. Other European countries rightly wonder why, if the Government are interested only in a partially level playing field, should British goods be allowed free access to their markets, where there are higher standards of social protection and social legislation and where the social charter and the social chapter have been fully accepted?
In an earlier exchange with the hon. Member for Derbyshire, South (Mrs. Currie) I referred to the fact that the opt-outs, including the financial opt-out, are damaging the Government and Britain's position within the European Community. I referred to the recent survey by Ernst and Young, which clearly states:
There is already evidence that the United Kingdom's attractiveness for inward investment is being reduced by a perception that we are not in the main stream of the European debate.
That is a serious matter.
The hon. Member for Derbyshire, South and I are aware of the importance of investment, both of us having experienced the benefits of foreign investment in our parts of the country. If investment is dropping, as it certainly is, and if investment is threatened by the Government's European stance, there will be real worry. Both the Government and my former colleague in the European Parliament, Jacques Delors, have got it wrong. Far from Britain being an investment paradise, the result of this country being marginalised in Europe in future will be that inward investment will deteriorate rather than improve.
There are many sound reasons why British business and the Government should change their mind about the social opt-out. If the social opt-out is maintained, it will create many worries for British business. For example, multinationals with branches in the United Kingdom and other countries may find it easier to close plants in the United Kingdom during the recession, simply because the costs of closure and employment protection are lower in the United Kingdom than elsewhere. In addition, United Kingdom companies that are also multinational companies are concerned that, because other parts of Europe have accepted the rules of the social chapter, they will be subject to those rules elsewhere in Europe, but the United Kingdom will be unable to participate in discussions about the implementation of those aspects of social legislation.
Finally, and perhaps rather contradictorily, there is evidence that, even if it is thought in business circles that the social opt-out is desirable, they feel that in practice it is not possible and that the Government will be dragged unwillingly into accepting certain social regulations.
There is already evidence for that, due to the Government's half-hearted acceptance of the directive on the rights of pregnant women to work and their grudging acceptance of the need for all employees to have a written statement of employment, as well as their even more grudging acceptance, which has huge implications for the compulsory competitive tendering procedure in the United Kingdom, of the acquired rights directive.
Business is starting to say that it is surely better to be in there negotiating rather than eventually having to be dragged along, without any influence, and therefore getting the worst of both worlds. The Government's claim that employment protection measures destroy jobs looks increasingly threadbare, at a time when Britain has the fastest rise in unemployment in the European Community.
In case there should be any doubt about it, my belief in the social charter and social chapter is due to my conviction that they will bring benefits to some of Britain's lowest-paid and least protected employees, and there are all too many of them. In the past, Britain was described as a nation of shopkeepers. What worries me is that, if the Government persist in going down the route that they have chosen, we shall become a nation of sweatshop keepers. In addition to the moral reasons for accepting the social chapter, there are good practical reasons for ending the social opt-out that the Prime Minister agreed at Maastricht.
Many hon. Members have referred to the economic situation, and Labour Members have referred to the weakness of the United Kingdom economy within the European Community. Government policies have weakened our position, and significantly the United Kingdom was the only EC economy that contracted last year. Our weakness was evident during the turbulence on the money markets earlier this year. The pound buckled under the pressure, whereas the franc managed to survive.
That was a consequence of the weakness of our economy and of the foolishness of the Government in joining the ERM at a time that was politically convenient because of the Tory party conference rather than industrially appropriate, and at a level that would have helped industry and the exports on which we all depend. Furthermore, a Government who were at the heart of Europe would have been able to reorganise a general realignment of currencies before the monetary turbulence, but the Government's marginality at that time was clear.
I should like Britain to attach greater priority to economic growth and co-ordinated European action to create jobs, as many hon. Members have said. It seems that the Government have made a mini U-turn in the autumn statement and in their recent pronouncements that they would like to agree a recovery package with our European partners. I agree strongly with my hon. Friend the Member for Ashfield (Mr. Hoon) that it is a pity that the Government have adopted that attitude only at this late stage. Many of us argued for such a co-ordinated recovery package in the recession at the beginning of the 1980s, never mind in the current recession.
It is outrageous for the Government to claim that Europe is following the lead that they gave in the autumn statement. Many people in Europe have wanted the United Kingdom Government to take a more positive attitude to economic recovery, and have been disappointed when the Government have been unwilling to put money into European infrastructure projects. That was particularly true at a time when the Government were running a huge budget surplus, which offered a golden opportunity to lay the foundations for our economic prosperity.
My hon. Friend the Member for Ashfield referred to cuts in the research and development budget, and I echo his concerns. We should not be cutting this key area of European spending, and certainly not at this economic juncture.
Subsidiarity has been mentioned by many hon. Members, including the hon. Member for Eastleigh (Mr. Milligan) and the Foreign Secretary. I always understood it to mean that decisions should be taken at the lowest appropriate level. I therefore agree with Labour Members who said that subsidiarity has obvious relevance to our structure and decision-making within the United Kingdom, as well as to European decision-making. It has obvious relevance not only to Scotland and Wales but to the regions of England. Much has been done recently by local authorities and regional bodies in the northern region to forge direct links between the regions and the European Community.
I assure the Foreign Secretary that, in my part of the country, there is real feeling that subsidiarity is relevant to us and our regional future not only within the United Kingdom but within the European Community. I should like to commend to him the work of the Northern Development Company, which was set up with the support of local industry, trades unions and local authorities to achieve a high profile in Brussels and to promote the economic development of our region at home.
Activities in the northern region have been paralleled by those in other regions of the United Kingdom, including Yorkshire and Humberside, the east and west midlands, the north-west and the south-west, all of which have taken steps towards establishing their own identity within the European Community, and wish to benefit from the principle of subsidiarity.
My hon. Friend the Member for Copeland (Dr. Cunningham) referred to the Committee of the Regions. I hope that, when the Government finally get round to dealing with the United Kingdom's representation on the committee, they will ensure that not only Scotland and Wales but each of the English standard planning regions are represented. The representation of the committee should reflect the political views of the region, and its members should be chosen from the regions, rather than being appointed by the Government from within the ranks of their own supporters.
In the three areas to which I have referred—the economy, the social dimension and the regions—Britain is in danger of being marginalised and weakened if the Government pursue their present course. By treading the fine line between their pro-European and Euro-sceptic supporters—and failing to satisfy either—they are isolating and damaging Britain and the British people. If we are to make a success of our EC membership, and if the British people are fully to benefit from it we must change course and achieve greater co-operation with our European partners.

Mr. Jonathan Evans: If I may, I shall turn later to some of the remarks made by the hon. Member for Gateshead, East (Ms. Quin), because I particularly wish to deal with her views on the ERM.
I shall begin by referring to two excellent speeches made by Conservative Members. My hon. Friend the Member for Eastleigh (Mr. Milligan), whom I am pleased to see in his place, made a magnificent speech. I also commend the speech of my hon. Friend the Member for Esher (Mr. Taylor), who spoke with some force about the fact that of late the European debate has been affected by too much


negativity. That negativity may have been stimulated by two events in the summer—the Danish vote on Maastricht and the currency turmoil in the ERM in September.
Much of that negativity was evident in the speeches of Opposition Members, such as in the gloomy prognosis of the hon. Member for Alyn and Deeside (Mr. Jones). I know the hon. Member, who I am sorry is not in his place, very well from his former role as shadow Secretary of State for Wales. We heard from him a litany of gloom that we have heard so many times. He was the shadow Secretary of State 13 weeks ago, and there have been three shadow Secretaries of State for Wales in the past 13 weeks, compared with three Secretaries of State in the past 13 years. Those Secretaries of State have managed to achieve a substantial transformation in the Welsh economy largely because of the positive stance that each has taken to our role within the European Community.
Those who paint gloomy pictures of the difficulties that business may be facing should consider the example of Wales, where the rate of unemployment is lower than the national average. Just after the war, 250,000 people were employed in the mining industry in south Wales, whereas today, even before the latest announcement that has caused so much turmoil in the House, only four mines remain in operation. However, jobs were found for so many of those people in enterprises backed by the substantial record of inward investment that we have managed to achieve in Wales.
A fifth of all United Kingdom inward investment has come to Wales. Why? Because the Secretary of State and his team have sold the benefits of Wales as a part of Europe. It is the advantage of being able to manufacture in Wales and to be able to sell to the European Community. Many people in Wales now have employment in Bosch, in Sony, in Panasonic and in other well-known companies which have chosen to base themselves in Wales primarily because of what we have been able to achieve in terms of a positive relationship with the Community. That is why it is so important that the House should start to develop a more positive approach towards our position in the European Community.
From time to time, there may be good reasons to question some aspects of our European partners' policy. There are good reasons for us currently to question German monetary policy. We may all agree that we question France's stance on the general agreement on tariffs and trade settlement. However, that is not a reason why we should decide that we shall be negative generally about our membership of the Community.
At Edinburgh, Mr. Delors is expected to present a statement about the economic situation in the Community. It is essential that the Community addresses the difficulties being caused across Europe by the recession. All hon. Members must recognise that the recession has caused difficulties across Europe. The difficulties have been substantially alleviated in the longer term by the excellent settlement that has now been reached in the long-standing dispute between the EC and the United States. We now hope that that settlement will lead eventually to a proper GATT round settlement.
In that regard, it is somewhat churlish of Opposition Members not to recognise the demonstrable qualities of my right hon. Friend the Prime Minister, who decided to

take charge of that situation. He averted a trade war which threatened not only Europe, but the whole world. We were days or weeks away from such a prospect. My right hon. Friend managed not only to achieve the reinstatement of Commissioner MacSharry but the backing of Jacques Delors, the President of the Commission, for the proposal.
I represent an agricultural constituency, so I recognise many of the concerns in the farming community about whether the settlement can be accommodated in the terms of the common agricultural policy reform settlement which was agreed earlier this year. Farming has been in recession for some time, and many farmers are concerned that there may be yet further reductions in farm incomes. However, my constituents recognise that a GATT round settlement is important to the whole of Britain, to the whole of Europe and to the whole world. In those circumstances, they believe that it would be disastrous if the settlement were set aside in the narrow, sectional, national interest of French sunflower growers.
There is no justification for the French Government's current position. I also find it unacceptable that, during the course of what was likely to be a difficult negotiation, the French, or some elements within the French team, seemed to have tried to strengthen their hand by the inspired leaks of documents which exaggerated the effects of a settlement. We have come to expect such conduct from the Labour party, but we do not expect it from our European colleagues. I hope that that point will be made with some force during the discussions between our Ministers and their French counterparts.
The hon. Member for Gateshead, East mentioned the turmoil in the exchange rate mechanism in September. That has also had a fundamental effect in terms of confidence and in an attitude of negativity towards the Community. However, we are wrong to assume that coming out of the ERM was some great boon or bonus for the British economy. On the contrary, the effect of the devaluation on our trade deficit is that it has now broadened, as reported in our newspapers today. That is contrary to all the blandishments we heard on the matter from the Euro-sceptics. I note that there has been a far more positive approach from Conservative Members in this debate. Incidentally, I do not understand the operation of the so-called J-curve, another economic manifestation which seems to have worked its way into financial analyses of late.
There seems to be a presumption that the turmoil in the ERM affected only Britain in September. That was implicit in the remarks by the hon. Member for Gateshead, East. She said that the franc had survived—for now, I am bound to say. It seems that Mr. Schlesinger, the head of the Bundesbank, displeased by the 0.25 per cent. reduction in interest rates that was forced on him in September according to The Guardian, which I note from earlier debates today can be quoted in the House, may now be prepared to jettison the franc and even Maastricht in dealing with inflationary pressures on the mark.
We know that the franc is vulnerable. The competitiveness of the French economy has been damaged by the series of devaluations and realignments of other European currencies. It had been felt that France might have escaped by being offered an interest rate cut by the German authorities, but those prospects have evaporated today with the news, which I was at pains to draw to the attention of my hon. Friend the Member for Esher, that Germany's M3 money supply figure out today shows a


surge to 10·2 per cent. against an annual 5·5 per cent. target figure. That seems to remove the last prospect of an easing of German interest rates.
That increase clearly shows that even Germany is not immune from the effects of currency fluctuations across Europe. It is the fact of those currency fluctuations with so many of the funds flowing into the mark which has resulted in the substantial expansion of German monetary supply. According to City analysts, the next targets for the currency speculators are the French and the Irish. The latest news appears to show that the strain on those currencies is building day by day. That news demonstrates the clear need for far greater economic co-operation between the countries of the European Community.
I was pleased to note from the remarks of my right hon. Friend the Chancellor this morning that he has for some time been pressing the German Finance Minister on the operation of German monetary policy. It is clear that the way in which German monetary policy has operated in terms of interest rates has had a most damaging effect not just in Britain but on all the countries in the EC—and will shortly, it seems, have such an effect on Germany itself.
The Delors 2 package appears to have been welcomed by the hon. Member for Ashfield (Mr. Hoon). It was particularly interesting to hear his glowing tribute to Delors 2, given that only three weeks ago he was in the Opposition Lobby voting to kill Maastricht dead. The Government's position on the Delors 2 package is quite right. At a time such as this, it is appropriate that we should be seeking value for money from all the operations of the Community and important that we should expose the myths as they come across.
My hon. Friend the Member for Eastleigh mentioned some of the myths that have been put about concerning European regulations. I am pleased to note that my right hon. Friend the President of the Board of Trade has been put in charge of scything through home-grown regulations, because, from my experience of the Ministry of Agriculture, Fisheries and Food and also of the regulations that come from Europe, I believe that there is even more work for the President of the Board of Trade to do here at home than there is in Brussels.

Dr. Norman A. Godman: As a Scots Member, I envy the hon. Member for Brecon and Radnor (Mr. Evans) and the people of Wales the Welsh Development Agency. We had a Scottish Development Agency which the hon. Gentleman's ministerial colleagues in Scotland chose to execute—a matter of regret for many Scots. Like the hon. Gentleman, who represents a Welsh constituency, I live in a multinational state, so I have a fairly relaxed attitude to the multinational European Community.
One of the most sickening moments that I have experienced in recent months was when the Government opted out of the European Community's social chapter. That is where the hon. Member for Brecon and Radnor and I part company—pretty fundamentally, I am sure. The appearance of the social chapter in the Maastricht treaty represented for me the first real glimmer of hope that the Community might become the liberating association of peoples that its founders envisaged. Every other EC Government were enthusiastic but the British

Government—those market force morons—sought to scupper the social chapter, which they effectively but disastrously did.
It is typical of the myopia of the English Tory Government that they took us into the EC promising us huge economic benefits, whereas in fact we have finished up with the grant grabbing of the common agricultural policy and what I have described elsewhere as the Spanish piracy of the common fisheries policy. I have a great deal of sympathy with the remarks of the hon. Member for Banff and Buchan (Mr. Salmond) about the plight of the Scottish and, indeed, the United Kingdom fishing industry as a result of the management of fisheries by the bureaucrats in Brussels.
The original concept of the EC was remarkable: it represented a bringing together of European nations to prevent war, improve living standards in general and promote freedom. Those were laudable objectives. The social chapter is evidence that the early vision was not just a dream. The Community has expanded and will continue to expand and clearly cannot remain the greedy trading club which some little Englanders in Downing street and elsewhere desire. Admittedly, trade still seems to be the main engine of change in the Community, as evidenced by the Single European Act and monetary union, but in agreeing to the social chapter, other member Governments accepted that the rights of individual citizens and not just the rights of capital must be the Community's first concern. That, again, is an admirable view.
I should like to see the social chapter reinserted in respect of the United Kingdom, and its scope broadened to strengthen basic rights and working conditions and to cover provisions covering racial and sexual equality, pension rights, trade union recognition, maternity and paternity benefits, and so on. I want the harmonised standards specified to be based on the best standards, which are certainly not those of the United Kingdom. The biggest employer in my constituency—IBM, a major American multinational—has no worries about the social chapter, because it more than meets the stipulations laid down in that part of the treaty.
Priority must also be given to the decision-making processes in the EC, which remains profoundly undemocratic. It is true that new powers are to be promised to the European Parliament. Even so, as an institution it will remain essentially powerless to constrain the bureaucrats in Brussels and the Council of Ministers democratically. Within the past few weeks, I have asked in the House whether some openness could be introduced into the deliberations of the Council of Ministers, but was told that that cannot be the case because of confidentiality and the Council's rules, even though I think that there is a regulation on the Council's deliberations which would allow that.
I shall be brief as I know that another hon. Member wishes to speak, but I cannot sit down without a mention of subsidiarity. Nearly every other hon. Member has mentioned it en passant, even the hon. Member for Brecon and Radnor.
Subsidiarity could deal with some of the problems associated with the absence of checks on decision making, but the Prime Minister's version of it is that decisions should be taken at the lowest appropriate level—but certainly no lower than No. 10 Downing street. In Scotland, subsidiarity has a different meaning. We believe that it should mean consideration of key EC matters by a


strong Scottish Parliament with wide-ranging social, industrial and economic powers—a Parliament which would be much better in that regard than the German Lander or the Spanish regional Governments, which still exercise control over social and domestic matters in a way that we in Scotland can only dream of. Without that definition of subsidiarity, the idea of a Community of the regions remains a meaningless catch-phrase.
The Prime Minister's stocktaking of the governance of Scotland is a disingenuous attempt to lull or gull the people of Scotland into quiescence. We are all fortunate that the Scottish secessionist movement is, quite properly, peaceable and adheres to parliamentary democracy. Long may it remain that way, no matter how support for the Government, low as it is, may dwindle in the next few years.
Without the social chapter, the Maastricht treaty is unacceptable, and I shall argue along those lines during the next few weeks. The Government's definition of subsidiarity is also unacceptable.
I have mixed feelings about the European Community, because I welcome the establishment of the European Court of Justice, as a supreme court for the Scottish and English legal systems. What the Government deny us in the so-called United Kingdom we can sometimes obtain from European Community institutions and from that supreme court. I hope that it will decide against the Government in the case of commissioner's decision CS/27/91, made in Liverpool, which stated that the Department of Social Security's decision to stop the payment of invalidity benefit to women in the United Kingdom at the age of 60 was incompatible with a directive on equal treatment in social security matters which became European Community law as far back as 1979.
I asked a question of a Minister at the Department of Social Security on the Government's reaction to the commissioner's decision. The chief adjudication officer's office told me that he intends to appeal against the decision made in Liverpool. I asked what information the Secretary of State had
concerning the timing of the hearing of the appeal, at the Court of Appeal, of the chief adjudication officer against a commissioner's decision…and if he will make a statement.
The Parliamentary Under-Secretary replied:
A date for this case to be heard by the Court of Appeal has not yet been set since a decision is awaited on another case dealing with related issues and which is currently before the European Court of Justice".—[Official Report. 16 November 1992; Vol. 214, c. 77.]
Many thousands of women in the United Kingdom lose their invalidity benefit at the age of 60. Some of them have lost as much as £30 a week. So we must seek assistance from the European Court of Justice.
I have written to Commissioner Papandreou asking her to take the British Government to the European Court of Justice for their refusal to adhere to the commissioner's decision. More than 400 women in my constituency alone have been urged by me to apply for the benefit. One of them—Mrs. MacLatchie, of Port Glasgow—on the basis of the commissioner's decision received arrears payments of about£1,000 and is now receiving invalidity benefit.
The European Court of Justice is determining the issue, and the Official Journal of the European Community stated in its edition of 11 February, volume 35, that the court was considering the question:
Where national law provides that there shall be pensionable ages of 60 for women and 65 for men for the purpose of granting old age and retirement pensions and that there shall be an invalidity benefit scheme for persons of working age, does Directive 79/7/EEC require a Member State to apply the same upper age limit (if any) for both men and women when defining the scope of the scheme for invalidity benefit?
I hope that the judges who make up that supreme court for the 13 legal systems within the 12 nations of the European Community answer in the affirmative. I say that because the British Government, in the form of the Department of Social Security, are seeking to challenge in the English appeal courts the decision of the Commissioner to which I referred.
Commissioner Skinner said that the Department of Social Security was infringing European community legislation. I think I am right in saying that, under the treaty of Rome, the laws in those 13 legal systems must be compatible with European law. Thus, in the case that I have raised, concerning 400 of my constituents and thousands of women in other parts of Britain, I hope that the European Court of Justice will decide that the British Government are wrong to stop the payment of invalidity benefit to women claimants at the age of 60 when men continue to receive it until they are 65.
I confess that I was not happy when the European Court instructed the British Government to change a provision in the Merchant Shipping Act 1988, an instruction which harmed the fishermen of Scotland and elsewhere, including the constituents of the hon. Member for St. Ives (Mr. Harris). But in the types of case to which I have referred today, involving social directives, that court has proved to be in every sense of the word a supreme court, with power to instruct national Governments to adhere to European legislation.
My hon. Friend the Member for Barrow and Furness (Mr. Hutton) expressed his concern about the problems bedevilling the shipbuilding industry. I too have those problems. I believe that methods can be evolved within the Community which will give the same amount of protection to our communities as has been given to those in east Germany. But, as I have said, Maastricht without the social chapter is unacceptable to Labour.

Mr. James Paice: As the House will be aware, pulling up the tail end, so to speak, before the Lord Major's show gets back on the road is not the most delightful experience. However, I will try to make one or two points, which have been expressed already in various ways.
First, however, I want to make the point that one of the most enjoyable things about sitting through several hours of this debate—there have not been many enjoyable aspects—has been that the majority of speeches from both sides of the House have been by hon. Members who clearly have the interests of Europe, and this country within Europe, at heart. Although there have been difference of opinion between those on the two sides of the House, basically centred on the level of public expenditure in its European guise, there has been evidence of a widespread belief that this country's future is inextricably entwined


with the future of Europe. That is a tremendous change from many debates that we have had in the House on Europe.
I have unashamedly supported the Maastricht treaty ever since my right hon. Friend came back from Maastricht nearly a year ago. I want the House to move very quickly towards its ratification. I recognise that it will take many months of debate in the House to achieve all the Bill's stages, but, like others, I hope that we shall see the Third Reading early in May or soon after, even if the Danes do decide to defer any future referendum at that time.
There are many reasons why I support Maastricht. One of the most significant is the whole question of enlargement. I have always believed it somewhat strange that we should appropriate the term "Europe" to describe a minority grouping of the countries of Europe. In my view, the European Community will never be a full community until it reaches out and is able to embrace all the countries of the continent of Europe that wish to be part of it.
There is an element of British self-interest in seeking enlargement. It is a question of the balance of power between those who are contributors to, and those who are recipients of, the European Commission's expenditure. My right hon. Friend the Prime Minister has made the point abundantly clear, and I endorse it. The pressure for increased expenditure from the centre—the demand in Delors 2—supported, as we have heard this evening, by many hon. Members, will be considerably reduced with the admission to the Community of the European Free Trade Association countries, which will be helping to pick up the bill for any extra expenditure and, through their voting powers within the Community, seeking to redress that balance.
There are, of course, other aspects connected with enlargement. One is the size of the European Parliament, and I hope very much that my right hon. Friends will resist the pressure from Germany to increase its representation. At the moment it is a simple system, with larger and smaller countries grouped into different brackets without specific reference to differences in population. It would be a retrograde step to move along the road of more closely reflecting population differences, because there would then need to be a clear reassessment of the representation or all countries, not just Germany.
The same applies in many ways to the question of the size of the Commission. It is important to provide sufficiently flexible and wide structures for Europe to allow for maximum participation by others as the Community develops in the short and medium terms.
Much has been said this evening about the European Community's significance to our economy. I wish to comment specifically on fiscal harmonisation and value added tax. Almost all the other member nations of the Community have multiple rates of VAT. We are in a tiny minority to restrict ourselves to just a standard and a zero rate of VAT.
I have always supported the Government's market-led approach towards harmonisation, but it is a two-way process, which requires the Government to respond to the market. I have spoken previously in the House about VAT on bloodstock, and I am delighted that my right hon. Friend the Paymaster General, who is responsible for that, is in his place tonight. I shall not go through all those arguments again, as he is familiar with them—

Mr. George Robertson: Watch the time.

Mr. Paice: I am well aware of the time. Perhaps the hon. Gentleman should draw it to the attention of the hon. Member for Greenock and Port Glasgow (Dr. Godman) who, having said that he would take only a few minutes to speak, took 17 minutes. I wish to make a few quick points before I sit down.
The Government must re-examine their approach to fiscal policy vis-a-vis business competitiveness. We cannot demand and expect sovereignty over our fiscal policies and taxes while ignoring the external pressures placed on them. Although it is correct to say that our future economic well-being is tied up with that of Europe, it is perverse to ignore any fiscal handicaps placed before it. I have made that point to my right hon. Friend the Paymaster General several times in the past, and I look forward to his resolving the difficulties with which he is familiar.
I conclude—grudgingly, because I wanted to make a number of points—by echoing the words of my hon. Friends who have said that we must make progress in Europe with determination but with the spirit of ensuring that our future well-being within Europe is not jeopardised. We must fight for what we believe to be right.
Europe is not an ogre. It is all of us and all around us, and our economy is clearly entwined within it. However, the development of Europe must work with the flow of public opinion, not against it. Some national leaders within the Community have not yet caught up with the change of public opinion in their countries against the trend of centralism. In this country, we are at one. When and if one can explain to the people of this country my right hon. Friend the Prime Minister's policies on the future of Europe, the vast majority of people will support: that approach.
The sting in the tail is the word "explain". We have much more to do. Many hon. Members on both sides of the House are guilty of allowing the floor to he held too much by those who are basically opposed to an extension of our involvement within Europe. We have allowed the minority to have their way for too long. One message that has come out of tonight's debate is that the tide has now turned.

Mr. Andrew Smith: I agree with the hon. Member for Cambridgeshire, South-East (Mr. Paice) about the constructive tone of the debate. It is a pity that the contributions have not been matched by the motion, which shows the Government's poverty of ambition and action. It amounts to nothing more than taking note of that great bundle of documents.
Where are the proposals to fire the imagination of peoples across Europe and rebuild confidence in what the Community can achieve? Where are the proposals to set in motion the reform of Community financing? Where is the action to tackle the democratic deficits? Where is the force for emancipation to which my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) referred? Hon. Members will look in vain through the documents, just as they will have listened in vain to the Foreign Secretary for such information, other than what he said about GATT. Indeed, the Foreign Secretary found the motion so eminently forgettable that he almost forgot to move it.
As is perhaps inevitable with such a big bundle of documents covering so many aspects, the hon. Members who participated in the debate have approached the issues from a variety of angles, some more technical than others. I look forward to the Paymaster General's response to the issues raised by the hon. Member for South Hams (Mr. Steen) on the impact of the fiche d'impact, and those raised by my hon. Friend the Member for Greenock and Port Glasgow and the hon. Member for Banff and Buchan (Mr. Salmond) on fishing and fish of all sorts, including the Hogmanay haddock. The needs of both small firms and the fishing industry are crucial, and deserve a proper response from the Government.
The hon. Member for Wolverhampton, South-West (Mr. Budgen) presented a persuasive case, stating that the operation of parliamentary democracy would be immeasurably enhanced if we did not have the Tory Whips. I thought that that was an interesting observation.
I agreed with what my hon. Friend the Member for Gateshead, East (Ms. Quin) and the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) said about subsidiarity having to apply to the counties and regions of the United Kingdom. They said that additionality must mean extra spending, not substitution for spending that would have happened anyway. I join the hon. Member for Ross, Cromarty and Skye in praising the achievements of Commissioner Bruce Millan in that respect.
The hon. Member for Leominster (Mr. Temple-Morris) ably embodied, as did the hon. Member for Esher (Mr. Taylor), the group characterised this evening as "Whitney's Wonders". They embody one side of the chasm in the Conservative party. The hon. Member for Leominister was right to speak of the difficulties to which an indefinite attempt to stand aside from managed exchange rates would cause this country. The Government would do well to heed that warning.
The hon. Member for Leominister was also right to speak of the tragic farce of the channel tunnel being linked to the high-speed rail network on the other side of the channel, but having no similar links on this side. It should be linked to the whole of Britain as well as to London. However, the hon. Gentleman must ask whose fault that is. The Government must accept their responsibility for that abject failure.
Britain desperately needs coherent and positive policies for infrastructure investment and a proper industrial strategy. My hon. Friend the Member for Barrow and Furness (Mr. Hutton) spoke powerfully and with expertise on behalf of shipbuilding in general and his constituents in particular. How right he was to stress the importance of a concerted British and European strategy to build up and build on our superb engineering skills. He was also right to talk of the value of European co-operation and the Maastricht process in countering the appalling outbreaks of fascist and racist violence that the Community has witnessed.
As my hon. Friend the Member for Copeland (Dr. Cunningham) said, it is clear that the Government are in utter confusion over their European policy, European recovery, the EC budget and, today, the United Kingdom abatement. The House will have seen the headlines that were full of the Government gloss of Euro-expansion. Yesterday's edition of The Daily Telegraph proclaimed:
Major urges Europe to go for growth".

What does that amount to? It is so much froth, and will be even more short-lived than the confident hype surrounding the autumn statement.
When I listened to the Chancellor on the "Today" programme this morning, I heard no hint of Euro-growth. I see that the Chancellor is entering the Chamber on cue. He said that he hardly recognised what was in the newspapers. Perhaps that was because it was the Prime Minister who put the stories there and not the Chancellor. However, the Chancellor denied this morning that there was to be lots of new spending for European recovery. He stressed that no figures had been discussed at any time. He announced no new projects. I see him nodding. He said that anything that happened would be reallocation of existing money.
We would have welcomed yesterday's change in rhetoric. We have long been urging a concerted European programme for recovery. As my hon. Friend the Member for Alyn and Deeside (Mr. Jones) said eloquently, we need, Wales needs and his constituents need precisely such a programme. The problem, as with the autumn statement, is that yesterday's rhetoric is not matched by today's reality. How much better it would have been if, instead of this anodyne motion, the Government had proposed real measures showing how the EC budget and the European economic recovery programme were setting Europe on the road to sustainable prosperity and full employment.
As to the budget itself, far from any stimulus to growth, the papers before us show cuts in important Community programmes. Unlike the hon. Member for Derbyshire, South (Mrs. Currie), who could not make up her mind whether to disparage more the excellent Derbyshire county council or the Treasury, I find the Treasury memoranda helpful. Annexes A and B to the memorandum of 19 November set out precisely the cuts that we face. My hon. Friend the Member for Ashfield (Mr. Hoon) referred to them.
At a time when the United States and Japan are planning to spend huge sums on research, what possible sense can it make for the British presidency and the European Council to propose cuts of 12 per cent. in Community-funded research? That is bad not just for Europe but for Britain, because research is one of the areas in which the United Kingdom has derived benefit from Community expenditure.
At the start of the full operation of the single market, when environmental and social concerns have never been more pressing in Europe, how could it be right to propose cuts of 8 per cent. in the budget for environmental policy, consumer protection and social policy?
When there is such starvation in the third world, how can even the British Government attempt to justify cuts in food aid of no less than 22·5 per cent.? Those cuts show the lack of vision of the British presidency, and how the Government are failing to respond to world and European needs, just as they have failed to respond to Britain's needs. Indeed, as my hon. Friend the Member for Gateshead, East pointed out with her telling reference to the Ernst and Young report, Britain is already paying a price through lost investment as a consequence of the Conservative Government's semi-detached stance towards Europe.
Fundamental problems remain over the resolution of the EC budget itself. I ask the Paymaster General to make clear to the House what the Government propose on the cohesion fund. It is conspicuously absent from the Council


version of the budget before us. The Government are on record, in the Chancellor's evidence to the Select Committee on the Treasury and the Civil Service last February, as having
reservations about the whole question of achieving an adjustment by the transfer of resources".
Will the Government now tell us whether they accept the need for resources so that the cohesion fund can be set up, and how much they propose to put into it?
A further problem, aggravated by the Chancellor's comments on "Today" this morning, is the United Kingdom abatement. The Chancellor said that there would be
no serious, significant, adverse change in our abatement; that would not be easy for us to accept.
That has spread further confusion, because the Chancellor did not say that such a change was unacceptable; indeed, he seems to accept that some change may be envisaged.

The Chancellor of the Exchequer (Mr. Norman Lamont): The hon. Gentleman is quite wrong. We are not prepared to accept a change in it.

Mr. Smith: That contradicts the references earlier to the way being open for technical change. When does technical change become a concession of substance? That is a matter to which we shall return.
On a wider macro-economic policies for the Community, the Government seem to be groping their way around another rather murky S-bend. They are reported to be considering proposals for the Edinburgh summit.
I return to yesterday's The Daily Telegraph, in which Downing street was reported to have said:
Our aim is to extend the British strategy for recovery across Europe.
That will really have them dancing in the streets of Naples. We and our European partners should be told which bit of the British strategy the Government are so keen to wish upon the rest of the EC.
Is it the 2·5 per cent. cumulative cut in real domestic product that Britain will have seen during the past three years, even if the Government manage to realise their pathetic 1 per cent. growth target for next year? Is it the 4·5 per cent. fall in employment, the 5 per cent. drop in industrial production, the 11 per cent. fall in business investment or the 12 per cent. fall in fixed investment? Which bit of the British economic miracle are the Government wishing on the rest of the EC?
In the same article, describing a possible Government Delors-style initiative at the European summit, a Treasury inside source said:
You could say it is an attempt to steal his clothes.
That shows just how few clothes the Government have of their own, and how embarrassed they are at their inadequacy.
We saw a few of the Opposition's clothes stolen in the autumn statement. Government by kleptomania is now the Tory style. I warn the Conservative party that, as they pick bits piecemeal from Labour's proposals but the public see them as half-hearted, hesitant, renouncing from No. 11 Downing street today that which was hyped-up from No. 10 Downing street yesterday, as they see the Government refusing to adopt our full-blooded programme for recovery, all the Conservatives will succeed in doing is legitimising and popularising what the Opposition are saying.
As the public's appetite for active government is whetted, they will turn increasingly to the party which believes in it, not the Government who have spent more than a decade preaching the virtues of so-called non-intervention. An ideological tide is turning, as people realise that common action is needed to solve common problems, that Government must build a partnership with industry, with employees, with trade unions, with regions and with the countries of the United Kingdom, as well as with our European partners.
For that partnership to work, it must embrace everybody. It cannot cut out the trade unions or the workers covered by the wages councils or the poor and dispossessed. The Government cannot say yes to the single market but no to the social chapter, yes to Maastricht but no to progress on economic and monetary co-operation, and they cannot say yes to subsidiarity abroad but no to subsidiarity at home.
Throughout the British presidency, the Government and the Prime Minister have tried to face both ways. As someone memorably said, they go into Europe like a gatecrasher walking into a party backwards assuring those around them that they are just on their way out. The truth is that the British presidency, at this crucial time in the Community's development, has been chronically and irretrievably enfeebled by the yawning chasm in the Conservative party.
Faced with the Conservative record of ambivalence, incompetence and missed opportunity, the House can have no confidence in the ability of a Government who have achieved so little in the first five months of their presidency now to bring about all that is needed in their last five weeks. A new purpose, new partnership, and new direction are called for in Britain's policies on Europe, and I ask the House to signal that new direction by voting for our amendment.

The Paymaster General (Sir John Cope): I will respond in the time available to as many as I can of the points raised in this wide-ranging and timely debate. We are at a key moment in the Community's development, given that we are in the run-up to the Edinburgh European Council and also—though not entirely—because of the Maastricht debate, about which we heard a good deal today.
Today's debate was timely also because we are 37 days away from the completion of the single European market—a concrete realisation of our commitment to the principles of the free movement of goods, services, people and capital. Furthermore, we are working towards settling the Community's financial framework for the coming years, as well as the 1993 budget.
The GATT talks to free world trade have moved forward again, we are preparing for the Community's enlargement, and we are leading the humanitarian effort and the call for greater United Nations involvement in the conflict in Bosnia and other parts of the former Yugoslavia. We are strengthening our links with the democracies of central and eastern Europe.
Apart from that terrific agenda for the presidency that we have been vigorously pursuing, all the countries of the Community face difficult economic problems and a tight financial situation. All those issues are central to our economic and political well-being and to British prosperity, which is why they are so important to us.
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs spoke earlier about some of the major themes of our presidency and of the Council. I shall focus principally on economic and financial issues. None is more important than the single European market. I assure my hon. Friend the Member for Esher (Mr. Taylor) that we shout from the rooftops whenever opportunity offers—including now—the central role that the single market is playing in the well-being of this country and of the European Community.
The single European market will bring real benefits for British business and for British individuals. It means more business opportunities, and that means more jobs. It means less red tape and lower business costs, with an end to routine customs controls and paperwork. The single market means that, as barriers to trade come down, consumers will have a wider choice of goods and services.
Employees will find wider recognition of qualifications, making it easier for people to live and work wherever they choose in the Community.

Mr. George Robertson: Was not one of the objectives of the single European market the harmonisation of value added tax rates? Can the right hon. Gentleman give an update on progress towards that?

Sir John Cope: Not harmonisation. After all, we are retaining fiscal sovereignty for the House, which is absolutely right. I suppose that the hon. Gentleman wants us to give away the financial powers of the House? The agreements are about minimum rates of VAT and excise duties, and that is how it should be.
Our membership of the single market has already made Britain a magnet for inward investment. My hon. Friend the Member for Brecon and Radnor (Mr. Evans) paid eloquent tribute to inward investment in Wales, and my hon. Friend the Member for Derby, South (Mrs. Currie) paid an even more eloquent tribute, if that is possible, to the beneficial effect of inward investment on jobs in south Derbyshire—but only after slating the Treasury, in the person of myself, for the wording of a particular explanatory memorandum. I am afraid that such texts must be rather complicated, but I accept her strictures.
As to inward investment, 40 per cent. of Japanese investment in the Community is in the United Kingdom. There was £17 billion-worth of inward investment in 1990, with 50,000 manufacturing jobs now flowing from that. The United Kingdom has some 40 per cent. of total United States investment stock in the European Community.
The single market will encourage British companies to invest in businesses in Europe. As the single market extends to the European economic area next year, United Kingdom businesses will have a home market of 375 million consumers. That will help us to compete in the world marketplace as well as within Europe.
I recognise that, as my hon. Friend the Member for Dover (Mr. Shaw) said, some people will not gain from the single market. His example was freight-forwarding agents and customs agents in his constituency and elsewhere. As the Commission has said, retraining of customs agents is primarily a matter for member states, but Community funding is also available from the social fund. In addition, the Commission is proposing a one-year package to assist redundant agents.
At the meeting of the Finance Ministers yesterday, there was a lukewarm attitude towards the proposals. Nevertheless, the discussions are continuing within the Council. Meanwhile, 30 million ecu have been entered in the draft budget, pending the adoption of a legal base.
The hon. Member for Copeland (Dr. Cunningham)—I must admit that it is a nice name for a constituency—

Mr. David Shaw: Will my right hon. Friend give way?

Sir John Cope: No, I must get on—I have little time and many matters to deal with. I have said all that I can about that particular matter.
The hon. Member for Copeland blamed the presidency for all sorts of things, including the recession. Several hon. Members have spoken about the prospects for growth and jobs. The United Kingdom presidency has given a clear lead to ensure that the Community takes effective action.
My right hon. Friends the Prime Minister, the Chancellor, the President of the Board of Trade and the Minister of Agriculture were tirelessly involved in paving the way for the GATT agreement. That is the most important step that the Community can take to boost confidence and growth.
OECD estimates suggest that an additional $200 billion in world output could follow. That is important not only to the United Kingdom but to the rest of Europe and much further afield. I have already referred to the single market, which is extremely important for the United Kingdom.
We propose a full discussion of the European economy at Edinburgh. As the House knows, and as we debated last week, the Government have introduced a package of measures for the United Kingdom. Within a framework of fiscal discipline, we have sought to sustain investment growth and rebalance public expenditure—constraining wages but protecting capital. All that is to boost confidence. Last week, the Labour party was unsure whether to claim credit for that or to attack us, and it was the same today. Similar measures could be taken and are being taken by other member states.

Mr. Andrew Smith: What specific measures and new projects for economic recovery and job creation will the Government propose at Edinburgh?

Sir John Cope: The discussion in Edinburgh will focus on the matters that I have just discussed. Member states are examining those matters. Measures are also being taken at Community level. The co-ordination and development of actions of member states are most important.[Interruption.] The hon. Gentleman may laugh, but that is the fact of the matter. At the Community level, there is scope, within a tight fiscal framework, for a shift in priorities. The European investment bank can be used to work with the private sector to increase transport and other capital projects. The Community can also encourage capital spending. We shall be discussing those matters further at Edinburgh, but there have been many discussions before. Of course, as my right hon. Friend said this morning, there are other matters of great importance, including German interest rates. Interest rates were also mentioned by my hon. Friend the Member for Esher and others.
We have heard a great deal about regulation and deregulation, especially from my hon. Friend the Member for South Hams (Mr. Steen). He made an entertaining speech about a series of controls of unspecified origin


which bore down on small firms in his constituency. He and the House will be aware of my involvement with small firms and my support for them as a boost to the economy. I am happy to tell him that, about two weeks ago, my right hon. Friend the President of the Board of Trade announced an enhanced role for the deregulation unit in the Department of Trade and Industry and the appointment of Lord Sainsbury to review the matter and investigate examples such as those to which my hon. Friend the Member for South Hams drew attention. My hon. Friend has given Lord Sainsbury a good agenda on which to start. I gather that Lord Sainsbury's remit covers both United Kingdom and European Community legislation.

Mr. Stuart Randall: There is some anxiety in the House about such regulations. Have the Government decided which of the regulations are acceptable to them and which are not? If some are not acceptable, what mechanism exists to ditch them?

Sir John Cope: If the hon. Gentleman is referring to domestic legislation, it is fairly easy to deal with the matter. For regulations in European Community legislation, the remedy is to go back to the European Community, to DG23 and so on. That is exactly what we do, and what we shall do in the cases highlighted by the committee to which I referred and by the deregulation unit of the DTI.

Mr. Steen: Will my right hon. Friend consider that we could shelve or delay implementation of rules and regulations until all the other countries implement the regulations that we have implemented?

Sir John Cope: We do our best to ensure that all the legislation is introduced at the same time and pursued equally by all member states. The Maastricht treaty will help us to achieve exactly that.
The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) asked about the Committee of the Regions and about several other matters. Ratification of the treaty will have to take place before the committee can be established. It would therefore be premature to examine the composition and procedures of the committee, but we are considering the matter and consulting on it.
Several hon. Members referred to subsidiarity and the position of Scotland. The matter was raised with my right hon. Friend the Foreign Secretary but also came up later in the debate. I was asked whether article 3.6 would be justiciable. The answer is yes, it will be justiciable once the treaty is ratified, but it is clear that article 3.6 is not about the internal organisation of member states.

Mr. Andrew Smith: The Minister means article 3b.

Sir John Cope: I beg the hon. Gentleman's pardon. I cannot read my own writing. Those who suggest that article 3b should deal with the internal organisation of member states would be widely criticised if they attempted to put that idea into practice. What it means, after all, is that the Maastricht treaty—or some other treaty—should affect the powers of the House, apart from anything else. That would be totally unacceptable, to say the least.
The hon. Member for Banff and Buchan (Mr. Salmond) entertained us with some discussion of Hogmanay haddock, but he also made some serious points. Fortunately, my hon. Friend the Member for Skipton and

Ripon (Mr. Curry) was in the Chamber at the time and heard what the hon. Gentleman said. My hon. Friend is currently Minister of State, Ministry of Agriculture, Fisheries and Food, and is also President of the Fisheries Council.
The hon. Member for Ross, Cromarty and Skye accused the United Kingdom of abusing the additionality requirements. I do not accept that for a moment; the United Kingdom complies fully with the spirit and the letter of the legislation. The hon. Gentleman may have been thinking of some delay by the Commission earlier this year in approving the United Kingdom's RECHAR allocation. That issue was resolved to the satisfaction of both the United Kingdom and the Commission as a result of a change in the presentation of the United Kingdom's structural fund receipts in the public expenditure documents.
A number of hon. Members mentioned the general issue of the United Kingdom approach to budgetary and financial matters. The United Kingdom's underlying net contribution to the European Community budget through the public sector is now running at some £2 billion a year—the figure would be much higher without the abatement. That is a large sum, but it is not the whole story. It does not reflect, for example, the substantial receipts which flow from the Community budget to the United Kingdom private sector, amounting to about £500 million a year.
In addition, some elements of Community budget spending directly substitute for what would otherwise have to be paid from our national budget. One example is external aid. The United Kingdom takes in structural fund receipts of more than £1 billion a year, which are extremely important to us; and, as a former Northern Ireland Minister, I can vouch for the significant contribution made by such receipts in the Province. One of the achievements of the 1993 budget is a doubling of the structural funds since 1988: that was a commitment that we undertook previously.
Several hon. Members referred to the position within the different objective regions, including the highlands and islands. Decisions on which regions will be classified as objective are for the review of the structural funds next year.
Let me say a word about the European Community budget. As originally proposed by the Commission, the commitments for so-called non-obligatory expenditure were to increase by no less than 15·8 per cent. I know that Labour Members always want to spend more on everything, but throughout the debate they have stressed the importance of spending just as much as the Commission and nearly as much as the European Parliament, which suggested that expenditure should rise by 17·67 per cent. in a single year. The Budget Council has reduced that to a 3·91 per cent. increase over 1992. That is still a considerable increase, but there is further discussion to come. I have already referred to the extra spending on the structural funds, which is within the expenditure to which I have referred.
Yesterday, we made it clear once again that we would not accept an adverse change in the abatement. An intervention from the hon. Member for Hamilton (Mr. Robertson) in the speech of my right hon. Friend the Foreign Secretary suggested that Labour would put the abatement up for negotiation. [HON. MEMBERS: "No."] I am glad to have that reassurance: it was not at all clear when the hon. Member for Dunfermline, East (Mr.


Brown) spoke on the radio this morning. It is very important that Britain should maintain that abatement. It is also very important that we maintain budgetary discipline, value for money and the fight against fraud, all of which we are doing in the budget this year, as part of the British presidency.

Question put, That the amendment be made:—

The House divided: Ayes 262, Noes 312.

Division No. 92]
[10 pm


AYES


Abbott, Ms Diane
Cunningham, Dr John (C'p'l'nd)


Adams, Mrs Irene
Dafis, Cynog


Ainger, Nick
Dalyell, Tam


Ainsworth, Robert (Cov'try NE)
Darling, Alistair


Allen, Graham
Davidson, Ian


Anderson, Donald (Swansea E)
Davies, Bryan (Oldham C'tral)


Anderson, Ms Janet (Ros'dale)
Davies, Rt Hon Denzil (Llanelli)


Armstrong, Hilary
Davies, Ron (Caerphilly)


Ashdown, Rt Hon Paddy
Davis, Terry (B'ham, H'dge H'l)


Ashton, Joe
Denham, John


Austin-Walker, John
Dewar, Donald


Banks, Tony (Newham NW)
Dixon, Don


Barron, Kevin
Dobson, Frank


Battle, John
Donohoe, Brian H.


Bayley, Hugh
Dowd, Jim


Beckett, Margaret
Dunnachie, Jimmy


Bell, Stuart
Dunwoody, Mrs Gwyneth


Benn, Rt Hon Tony
Eagle, Ms Angela


Bennett, Andrew F.
Eastham, Ken


Benton, Joe
Enright, Derek


Bermingham, Gerald
Etherington, Bill


Berry, Dr. Roger
Fatchett, Derek


Betts, Clive
Faulds, Andrew


Blair, Tony
Field, Frank (Birkenhead)


Blunkett, David
Fisher, Mark


Boateng, Paul
Flynn, Paul


Bradley, Keith
Foster, Derek (B'p Auckland)


Bray, Dr Jeremy
Foster, Don (Bath)


Brown, Gordon (Dunfermline E)
Foulkes, George


Brown, N. (N'c'tle upon Tyne E)
Fraser, John


Bruce, Malcolm (Gordon)
Fyfe, Maria


Burden, Richard
Galbraith, Sam


Byers, Stephen
Galloway, George


Callaghan, Jim
Gapes, Mike


Campbell, Mrs Anne (C'bridge)
Garrett, John


Campbell, Menzies (Fife NE)
George, Bruce


Campbell, Ronnie (Blyth V)
Gerrard, Neil


Campbell-Savours, D. N.
Gilbert, Rt Hon Dr John


Canavan, Dennis
Godman, Dr Norman A.


Cann, Jamie
Godsiff, Roger


Carlile, Alexander (Montgomry)
Golding, Mrs Llin


Chisholm, Malcolm
Gordon, Mildred


Clapham, Michael
Gould, Bryan


Clark, Dr David (South Shields)
Graham, Thomas


Clarke, Eric (Midlothian)
Grant, Bernie (Tottenham)


Clelland, David
Griffiths, Nigel (Edinburgh S)


Clwyd, Mrs Ann
Griffiths, Win (Bridgend)


Coffey, Ann
Grocott, Bruce


Cohen, Harry
Gunnell, John


Connarty, Michael
Hain, Peter


Cook, Frank (Stockton N)
Hall, Mike


Cook, Robin (Livingston)
Hanson, David


Corbett, Robin
Hardy, Peter


Corbyn, Jeremy
Harman, Ms Harriet


Corston, Ms Jean
Harvey, Nick


Cousins, Jim
Hattersley, Rt Hon Roy


Cryer, Bob
Henderson, Doug


Cummings, John
Heppell, John


Cunliffe, Lawrence
Hill, Keith (Streatham)


Cunningham, Jim (Covy SE)
Hinchliffe, David





Hogg, Norman (Cumbernauld)
O'Hara, Edward


Home Robertson, John
Olner, William


Hoon, Geoffrey
O'Neill, Martin


Howarth, George (Knowsley N)
Orme, Rt Hon Stanley


Howells, Dr. Kim (Pontypridd)
Parry, Robert


Hoyle, Doug
Pike, Peter L.


Hughes, Kevin (Doncaster N)
Pope, Greg


Hughes, Robert (Aberdeen N)
Powell, Ray (Ogmore)


Hughes, Roy (Newport E)
Prentice, Ms Bridget (Lew'm E)


Hughes, Simon (Southwark)
Prentice, Gordon (Pendle)


Hutton, John
Prescott, John


Ingram, Adam
Primarolo, Dawn


Jackson, Glenda (H'stead)
Purchase, Ken


Jackson, Helen (Shef'ld, H)
Quin, Ms Joyce


Jamieson, David
Radice, Giles


Janner, Greville
Randall, Stuart


Johnston, Sir Russell
Raynsford, Nick


Jones, Barry (Alyn and D'side)
Reid, Dr John


Jones, Jon Owen (Cardiff C)
Robertson, George (Hamilton)


Jones, Lynne (B'ham S O)
Robinson, Geoffrey (Co'try NW)


Jowell, Tessa
Roche, Mrs. Barbara


Kaufman, Rt Hon Gerald
Rogers, Allan


Keen, Alan
Rooker, Jeff


Kennedy, Charles (Ross, C&S)
Rooney, Terry


Kennedy, Jane (Lpool Brdgn)
Ross, Ernie (Dundee W)


Khabra, Piara S.
Rowlands, Ted


Kilfoyle, Peter
Ruddock, Joan


Kirkwood, Archy
Salmond, Alex


Leighton, Ron
Sedgemore, Brian


Lestor, Joan (Eccles)
Sheerman, Barry


Lewis, Terry
Sheldon, Rt Hon Robert


Litherland, Robert
Shore, Rt Hon Peter


Livingstone, Ken
Short, Clare


Lloyd, Tony (Stretford)
Simpson, Alan


Llwyd, Elfyn
Skinner, Dennis


Loyden, Eddie
Smith, Andrew (Oxford E)


Lynne, Ms Liz
Smith, C. (Isl'ton S & F'sbury)


McAllion, John
Smith, Rt Hon John (M'kl'ds E)


McAvoy, Thomas
Smith, Llew (Blaenau Gwent)


Macdonald, Calum
Snape, Peter


McFall, John
Soley, Clive


McKelvey, William
Spellar, John


Mackinlay, Andrew
Squire, Rachel (Dunfermline W)


McLeish, Henry
Steel, Rt Hon Sir David


Maclennan, Robert
Steinberg, Gerry


McMaster, Gordon
Stevenson, George


McNamara, Kevin
Stott, Roger


Madden, Max
Strang, Dr. Gavin


Mahon, Alice
Straw, Jack


Mandelson, Peter
Taylor, Mrs Ann (Dewsbury)


Marek, Dr John
Taylor, Matthew (Truro)


Marshall, David (Shettleston)
Thompson, Jack (Wansbeck)


Marshall, Jim (Leicester, S)
Tipping, Paddy


Martlew, Eric
Turner, Dennis


Maxton, John
Tyler, Paul


Meacher, Michael
Walker, Rt Hon Sir Harold


Michael, Alun
Wallace, James


Michie, Bill (Sheffield Heeley)
Wardell, Gareth (Gower)


Michie, Mrs Ray (Argyll Bute)
Wareing, Robert N


Milburn, Alan
Wicks, Malcolm


Miller, Andrew
Wigley, Dafydd


Moonie, Dr Lewis
Williams, Rt Hon Alan (Sw'n W)


Morgan, Rhodri
Williams, Alan W (Carmarthen)


Morris, Rt Hon A. (Wy'nshawe)
Wilson, Brian


Morris, Estelle (B'ham Yardley)
Winnick, David


Morris, Rt Hon J. (Aberavon)
Wise, Audrey


Mowlam, Marjorie
Wray, Jimmy


Mudie, George
Wright, Dr Tony


Mullin, Chris
Young, David (Bolton SE)


Murphy, Paul



Oakes, Rt Hon Gordon
Tellers for the Ayes:


O'Brien, Michael (N W'kshire)
Mr. Eric Illsley and Mr. Alan Meale.


O'Brien, William (Normanton)





NOES


Adley, Robert
Allason, Rupert (Torbay)


Ainsworth, Peter (East Surrey)
Amess, David


Aitken, Jonathan
Ancram, Michael


Alison, Rt Hon Michael (Selby)
Arbuthnot, James






Arnold, Sir Thomas (Hazel Grv)
Evans, Nigel (Ribble Valley)


Ashby, David
Evans, Roger (Monmouth)


Aspinwall, Jack
Evennett, David


Atkins, Robert
Faber, David


Atkinson, David (Bour'mouth E)
Fabricant, Michael


Atkinson, Peter (Hexham)
Fairbairn, Sir Nicholas


Baker, Rt Hon K. (Mole Valley)
Fenner, Dame Peggy


Baker, Nicholas (Dorset North)
Field, Barry (Isle of Wight)


Baldry, Tony
Fishburn, Dudley


Banks, Matthew (Southport)
Forman, Nigel


Banks, Robert (Harrogate)
Forsyth, Michael (Stirling)


Bates, Michael
Forsythe, Clifford (Antrim S)


Batiste, Spencer
Forth, Eric


Bellingham, Henry
Fowler, Rt Hon Sir Norman


Bendall, Vivian
Fox, Dr Liam (Woodspring)


Beresford, Sir Paul
Fox, Sir Marcus (Shipley)


Biffen, Rt Hon John
Freeman, Roger


Blackburn, Dr John G.
French, Douglas


Body, Sir Richard
Fry, Peter


Bonsor, Sir Nicholas
Gallie, Phil


Booth, Hartley
Gardiner, Sir George


Boswell, Tim
Garel-Jones, Rt Hon Tristan


Bottomley, Peter (Eltham)
Garnier, Edward


Bottomley, Rt Hon Virginia
Gill, Christopher


Bowden, Andrew
Gillan, Cheryl


Bowis, John
Goodlad, Rt Hon Alastair


Boyson, Rt Hon Sir Rhodes
Goodson-Wickes, Dr Charles


Brandreth, Gyles
Gorman, Mrs Teresa


Brazier, Julian
Gorst, John


Bright, Graham
Grant, Sir Anthony (Cambs SW)


Brooke, Rt Hon Peter
Greenway, John (Ryedale)


Brown, M. (Brigg & Cl'thorpes)
Griffiths, Peter (Portsmouth, N)


Browning, Mrs. Angela
Grylls, Sir Michael


Bruce, Ian (S Dorset)
Hague, William


Budgen, Nicholas
Hamilton, Rt Hon Archie (Epsom)


Burns, Simon
Hamilton, Neil (Tatton)


Burt, Alistair
Hampson, Dr Keith


Butler, Peter
Hanley, Jeremy


Butterfill, John
Hannam, Sir John


Carlisle, John (Luton North)
Hargreaves, Andrew


Carlisle, Kenneth (Lincoln)
Harris, David


Carrington, Matthew
Hawkins, Nick


Cash, William
Hawksley, Warren


Channon, Rt Hon Paul
Hayes, Jerry


Chaplin, Mrs Judith
Heald, Oliver


Churchill, Mr
Heath, Rt Hon Sir Edward


Clappison, James
Heathcoat-Amory, David


Clark, Dr Michael (Rochford)
Hendry, Charles


Clarke, Rt Hon Kenneth (Ruclif)
Heseltine, Rt Hon Michael


Clifton-Brown, Geoffrey
Higgins, Rt Hon Terence L.


Coe, Sebastian
Hill, James (Southampton Test)


Colvin, Michael
Hogg, Rt Hon Douglas (G'tham)


Congdon, David
Horam, John


Conway, Derek
Hordern, Sir Peter


Coombs, Anthony (Wyre For'st)
Howarth, Alan (Strat'rd-on-A)


Coombs, Simon (Swindon)
Howell, Rt Hon David (G'dford)


Cope, Rt Hon Sir John
Hughes Robert G. (Harrow W)


Cormack, Patrick
Hunt, Rt Hon David (Wirral W)


Couchman, James
Hunt, Sir John (Ravensbourne)


Cran, James
Hunter, Andrew


Currie, Mrs Edwina (S D'by'ire)
Hurd, Rt Hon Douglas


Curry, David (Skipton & Ripon)
Jack, Michael


Davies, Quentin (Stamford)
Jackson, Robert (Wantage)


Davis, David (Boothferry)
Jenkin, Bernard


Day, Stephen
Jessel, Toby


Deva, Nirj Joseph
Johnson Smith, Sir Geoffrey


Devlin, Tim
Jones, Gwilym (Cardiff N)


Dicks, Terry
Jopling, Rt Hon Michael


Dorrell, Stephen
Kellett-Bowman, Dame Elaine


Douglas-Hamilton, Lord James
Key, Robert


Dover, Den
Kilfedder, Sir James


Duncan, Alan
King, Rt Hon Tom


Duncan-Smith, Iain
Kirkhope, Timothy


Dunn, Bob
Knapman, Roger


Durant, Sir Anthony
Knight, Mrs Angela (Erewash)


Eggar, Tim
Knight, Greg (Derby N)


Elletson, Harold
Knight, Dame Jill (Bir'm E'st'n)


Emery, Sir Peter
Knox, David


Evans, David (Welwyn Hatfield)
Kynoch, George (Kincardine)


Evans, Jonathan (Brecon)
Lait, Mrs Jacqui





Lamont, Rt Hon Norman
Sainsbury, Rt Hon Tim


Lang, Rt Hon Ian
Scott, Rt Hon Nicholas


Lawrence, Sir Ivan
Shaw, David (Dover)


Legg, Barry
Shaw, Sir Giles (Pudsey)


Leigh, Edward
Shephard, Rt Hon Gillian


Lennox-Boyd, Mark
Shepherd, Colin (Hereford)


Lester, Jim (Broxtowe)
Shepherd, Richard (Aldridge)


Lidington, David
Shersby, Michael


Lilley, Rt Hon Peter
Sims, Roger


Lloyd, Peter (Fareham)
Skeet, Sir Trevor


Lord, Michael
Smith, Sir Dudley (Warwick)


Luff, Peter
Smith, Tim (Beaconsfield)


Lyell, Rt Hon Sir Nicholas
Smyth, Rev Martin (Belfast S)


MacGregor, Rt Hon John
Soames, Nicholas


MacKay, Andrew
Speed, Sir Keith


McLoughlin, Patrick
Spencer, Sir Derek


McNair-Wilson, Sir Patrick
Spicer, Sir James (W Dorset)


Maitland, Lady Olga
Spicer, Michael (S Worcs)


Major, Rt Hon John
Spink, Dr Robert


Malone, Gerald
Spring, Richard


Mans, Keith
Sproat, Iain


Marland, Paul
Squire, Robin (Hornchurch)


Marshall, John (Hendon S)
Stanley, Rt Hon Sir John


Martin, David (Portsmouth S)
Steen, Anthony


Mates, Michael
Stephen, Michael


Mawhinney, Dr Brian
Stern, Michael


Merchant, Piers
Stewart, Allan


Milligan, Stephen
Streeter, Gary


Mills, Iain
Sumberg, David


Mitchell, Andrew (Gedling)
Sweeney, Walter


Mitchell, Sir David (Hants NW)
Sykes, John


Moate, Roger
Tapsell, Sir Peter


Monro, Sir Hector
Taylor, Ian (Esher)


Montgomery, Sir Fergus
Taylor, John M. (Solihull)


Moss, Malcolm
Temple-Morris, Peter


Needham, Richard
Thomason, Roy


Nelson, Anthony
Thompson, Sir Donald (C'er V)


Neubert, Sir Michael
Thompson, Patrick (Norwich N)


Newton, Rt Hon Tony
Thurnham, Peter


Nicholls, Patrick
Townend, John (Bridlington)


Nicholson, David (Taunton)
Townsend, Cyril D. (Bexl'yh'th)


Nicholson, Emma (Devon West)
Tracey, Richard


Norris, Steve
Tredinnick, David


Onslow, Rt Hon Cranley
Trend, Michael


Oppenheim, Phillip
Trotter, Neville


Ottaway, Richard
Twinn, Dr Ian


Page, Richard
Vaughan, Sir Gerard


Paice, James
Viggers, Peter


Patnick, Irvine
Walden, George


Patten, Rt Hon John
Walker, Bill (N Tayside)


Pattie, Rt Hon Sir Geoffrey
Waller, Gary


Pawsey, James
Ward, John


Peacock, Mrs Elizabeth
Wardle, Charles (Bexhill)


Pickles, Eric
Waterson, Nigel


Porter, Barry (Wirral S)
Watts, John


Porter, David (Waveney)
Wells, Bowen


Portillo, Rt Hon Michael
Wheeler, Sir John


Powell, William (Corby)
Whitney, Ray


Rathbone, Tim
Whittingdale, John


Redwood, John
Widdecombe, Ann


Renton, Rt Hon Tim
Wilkinson, John


Richards, Rod
Willetts, David


Riddick, Graham
Wilshire, David


Rifkind, Rt Hon. Malcolm
Winterton, Mrs Ann (Congleton)


Robathan, Andrew
Winterton, Nicholas (Macc'f'ld)


Roberts, Rt Hon Sir Wyn
Wolfson, Mark


Robertson, Raymond (Ab'd'n S)
Wood, Timothy


Robinson, Mark (Somerton)
Yeo, Tim


Roe, Mrs Marion (Broxbourne)
Young, Sir George (Acton)


Ross, William (E Londonderry)



Rowe, Andrew (Mid Kent)
Tellers for the Noes:


Rumbold, Rt Hon Dame Angela
Mr. David Lightbown and Mr. Sydney Chapman.


Ryder, Rt Hon Richard



Sackville, Tom

Amendment accordingly negatived.

Main Question put and agreed to.

Resolved,
That this House takes note of the White Paper on developments in the European Community, January to June


1992 (Cm. 2065), European Community Documents Nos. 9649/92, relating to the principle of subsidiarity, 4829/92 and 5201/92, relating to Commission proposals for the finances of the Community to 1997, 5202/92, relating to the system of Own Resources, 5203/92, relating to renewal of the Inter-Institutional Agreement on budgetary discipline and improvement of the budgetary procedure, SEC (92) 1412, relating to the United Kingdom abatement, 8567/92, relating to establishment of a Cohesion Fund, COM (92) 140, relating to the Preliminary Draft Budget of the European Communities for 1993, 7933/92, relating to Letter of Amendment No. 1 to the Preliminary Draft Budget, 8209/92, relating to the Draft Budget, 9901/92 and the proposals described in the unnumbered Explanatory Memorandum submitted by H.M. Treasury on 19th November, relating to the European Parliament's proposed amendments and modifications to the Draft Budget, 6569/92, relating to the Court of Auditors' Opinion No. 2/92, the Annual Report of the Court of Auditors for 1990, the negotiating approach adopted by Her Majesty's Government in the run-up to the Edinburgh European Council on 11th to 12th December and the Government's continuing efforts to secure budgetary discipline and value for money from Community spending.

Mr. Nigel Spearing: On a point of order, Mr. Deputy Speaker.[Interruption.]

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Will hon. Members leaving the Chamber please do so quietly?

Mr. Spearing: I rise on a point of order of which I gave Madam Deputy Speaker prior notice. I must first apologise for not being able to raise it at the beginning of the debate, which would have been the more appropriate time. I have the best of reasons: I was on duty with a Select Committee meeting representatives of the Folketing in Copenhagen, and have just returned.
Under Standing Order No. 127, it is the duty of the Select Committee on European Legislation to refer to Standing Committees documents that it believes should be considered by the House before a decision is taken by the Council of Ministers in Brussels or wherever the Council is meeting. Under the Standing Order, the debate takes

place in Committee unless the House decides that the matters involved are so important that they merit a debate on the Floor of the House.
The Select Committee wanted 12 or 14 matters to be referred to the House and informed the Leader of the House to that effect. Consequently, a procedural motion was moved last week to the effect that the Standing Order should not apply and that the documents should be considered by the House before a decision was made in Brussels.
You will know, Mr. Deputy Speaker, that the Committee required the House to consider about 14 documents. They were laid on the Table and were available in the Vote Office last week, although when the Leader of the House announced the debate which has just taken place, he referred to it as a debate "on the budget".
I shall not rehearse the topics involved, as they were contained in the motion that the House has approved. The point is that, had the Select Committee decided that those matters were of lesser importance, it would no doubt have suggested that five or six debates should take place, batching the 14 papers together in Committee, in which case there would have been an opportunity to question each Minister for an hour, and for another two hours of debate, adding up to at least 10 and perhaps 15 hours.
Today, we had to consider the documents—which could have been hatched together in the way that I suggested—and also matters relating to the Edinburgh summit, to GATT and to the EC. My question is: having passed those Standing Orders, and as it is the clear will of the House and of the Government that national Parliaments and assemblies should be fully associated with those matters, has the obligation of the Government to provide time for debate and consideration of them been properly discharged?

Mr. Deputy Speaker: I assure the hon. Gentleman that the motion tabled was perfectly in order. It is not a matter for the Chair, and I suggest that he may wish to pursue it with the Leader of the House or the appropriate Ministers.

Orders of the Day — EC Banana Regime

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kirkhope.]

Mr. John Marshall: The European Community's banana regime is treated by some people as an issue of little moment or of much amusement, but it is vital for banana producers in the West Indies, the Canaries, the former French colonies, Somalia and also in Latin America. It is also important that any regime adopted by the Community guarantees fair competition between existing banana distributors and new entrants to the industry, and that it should take full account of consumers' interests.
I have been heartened by the interest shown outside the House—if not within it—since the debate was announced. I am glad that the interests of a liberal economist are shared by independent distributors, who are anxious to shake up the industry, and by retailers. A major food retailer wrote to me saying:
Tesco would like to work with our traditional suppliers applying its knowledge of improving production, packaging and the distribution process to the banana industry.
At the beginning of a debate, it is normal to declare an interest, and mine is that any regime adopted by the Community should benefit the consumer and encourage competition, which is the best guarantee of economic progress, but the European banana market is more akin to the Schleswig-Holstein question, of which it was said that one man who understood it had died, one had gone mad and the other had forgotten it.
The industry has an anomalous position, in that there are three different markets within the European Community. There are those designed for former colonies, such as the French market, the Spanish market, 'which imports from the Canary Islands, the United Kingdom, which imports from the West Indies, and Italy, which imports from Somalia. The Benelux market imports dollar bananas, imposing a 20 per cent. tariff. Germany is a banana addict's dream because it has no import restrictions and no tariffs, and the price of bananas is about two thirds of what it is in the United Kingdom; not surprisingly, consumption of bananas is much greater in Germany.
We recognise that bananas come from poor countries. The African, Caribbean and Pacific producers confirm that bananas are produced by people whose wage rates are low. Wherever we buy our bananas from, we are helping a third world producer. But the present British banana regime suffers from certain defects. British consumers are paying a third more than the Germans for bananas and per capita consumption is accordingly much less.
The second major fault with the British system is that three main authorised importers account for 90 per cent. of the importation of bananas. In any other industry, Fyffes, Geest and the Jamaica Banana Board would be referred to the Monopolies and Mergers Commission. Instead, import licences are allocated in secret in the United Kingdom. Because the licences are known to have a financial value, one importer will sell them on to another.
An institutionalised cartel is just as evil as any other cartel. It results in much higher prices and, while the objective of the cartel is to help producers in the Windward Islands and Jamaica, working papers produced by the

World Bank suggest that, for every dollar of aid given to ACP suppliers of bananas, the British consumer pays $5·30, and for every dollar that goes to the producers of bananas, the importer gets an extra $3. So the fat cats of the banana industry do three times as well out of protection in the United Kingdom as do the peasant farmers of the West Indies whom the regime is designed to help.

Mr. Bernie Grant: Hear, hear.

Mr. Marshall: I welcome the hon. Gentleman's support.
The monopoly profits earned by the distributors of bananas distort competition elsewhere in the fresh produce market. Those who enjoy the cushion of high banana profits are able to compete unfairly with those who do not. A tragedy of the situation that has existed since the mid-1940s is that inadequate attempts have been made by the importers of bananas to advise the farmers in the Windward Islands how to improve their productivity.
Productivity in the West Indies industry is half that of the Latin American industry. Protection breeds complacency and excessive profits, and many leading retailers would welcome the opportunity to import directly from the West Indies. The European Commission has produced a policy which is due to come into effect on 1 January 1993, but it has had to take account of conflicting trends and one wonders whether it has succeeded in that task.
The first question to ask about any policy is what impact it has on the consumer. A restriction on the import of dollar bananas would clearly harm the producer. Whereas, in 1992, about 2·6 million tonnes of dollar bananas were imported into the European Community, the Commission is proposing in 1993 a substantial reduction, to a base figure of about 2 million tonnes.
The second question must be whether the proposals will help the third world. Will the higher prices flow through to the producers in the West Indies or stick to the hands of the monopoly distributors? Currently, the higher prices in the United Kingdom have tended to benefit the distributors rather than the producers. The proposals, by severely restricting the right to import bananas, make it highly likely that a similar situation will prevail in the future.
The third question is whether the proposals will lead to the efficient production of bananas. A serious of policies designed to restrict imports from Latin America, where production costs are about half those in the West Indies, can scarcely result in increased efficiency. A regime that will not allow retailers in the United Kingdom, such as Sainsbury, Marks and Spencer and Tesco, to import directly from the West Indies and develop relationships with suppliers is not designed to increase efficiency. The United Kingdom food industry has been characterised by retailers developing links with suppliers and improving efficiency for the benefit of everyone.
It is not possible under the EC proposals, which give monopoly profits to favoured importers, who failed to encourage growers to improve quality in the past, to lock forward to an improvement in quality in the future. We must ask whether the proposals will do anything to help diversification among our suppliers, and clearly they will not.
It is not surprising that the proposals have led to widespread opposition within the Council of Ministers. I


think it fair to say that, within the Council, there is now a blocking minority led by Germany, and we have to recognise that the proposals would result in a substantial increase in prices in Germany. Outside the Council, the proposals have caused a great deal of unfavourable comment. The independent fruit importers recognise that the proposed regime would cause grossly unfair competition between them and the established importers. Those who are concerned about low-wage economies such as that of Dominica recognise that the problem of low wages in those countries will be aggravated by restrictions imposed on their exports to the European Community. Similarly, retailers are not happy with the proposals; nor are those who are concerned with the prosperity of the West Indies.
Many believe that West Indies producers would do better if they replaced the monopoly importers into the Community with a system of export boards. It is significant that growers of fruit in Israel, New Zealand and South Africa have all prospered by setting up their own system of export boards, and it might well be that the growers in the West Indies should do the same.
Many are concerned that most of the proposed assistance to the West Indies will be siphoned off in monopoly profits for a hand-picked group of favoured distributors. Latin American producers are concerned that the plan could cost them £500 million.
The proposals of the Commission are against the rules of the general agreement on tariffs and trade, and I am told that a number of exporters are unwilling to grant a GATT waiver. Perhaps the Minister would like to comment upon that.
We must ask the Minister, finally, whether it is right that the Commission should have proposed a 10-year transitional period to a free market. Obviously, a period of transition is right, but a period of transition that lasts for 10 years seems to me to be unconscionably long.
There is clearly pressure on the Council to reach a decision by the end of December, but it is much more important to reach a correct decision than to reach an early decision, because the policy will last a very long time. That is why I should like the Council to re-examine the possibility of tariffication—replacing the quota proposals with an external tariff. I believe that that would be acceptable to a number of countries that currently object to the Commission's proposals. I also believe that it would be acceptable to the independent importers, who are terribly anxious to increase their stake in the United Kingdom and other Community markets.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. David Curry): My hon. Friend the Member for Hendon, South (Mr. Marshall) began by saying that this was somewhat similar to the Schleswig-Holstein question: one man was dead, one was mad and the other had forgotten it. The one who had forgotten it was Palmerston, of course. I have to say that the options that were available to Palmerston are not available to Her Majesty's Government in present circumstances. Nor, I must say, is there any danger of anyone forgetting this issue. Indeed, there has been an intensity of lobbying on the banana issue which makes a trifling issue such as the

green rate for monetary compensatory amounts an absolute doddle compared with trying to sort out the future of the banana regime in the Community.
I must also point out to my hon. Friend that there is to be a detailed scrutiny debate on this matter shortly in Committee; therefore, there will obviously be the opportunity to discuss the matter in greater detail than, necessarily, is possible in an Adjournment debate.
As I am sure the House will recognise, we have here an extraordinarily difficult problem. We have a series of criteria, each of which is perfectly valid in its own right. We have the obligations under the Lomé convention, and nobody wishes to renege on those. We have the obligations that the existing GATT and the future GATT will impose as to the manner in which people are treated in the marketplace. That is another equally valid criterion. The introduction of the single market has implications for all the traditional arrangements and for the managed markets that have prevailed in many Community countries until now. Nobody pretends that those matters are not difficult to reconcile.
No one is bringing ill will to the debate, and my hon. Friend did not suggest that. Each country has different priorities and interests that best serve its national marketplace, and we must simply find a way through the problem.
It may help the House if I outline the elements of the Commission's proposal. The Commission has had as difficult a job as anyone else. Ultimately, it had to put its money on a particular horse, and it put it on the horse of trying to find a quantitive way of safeguarding the obligations under the Lomé convention.
The first element of the proposal is that there should be a quota on third-country imports, which are essentially dollar bananas. It also introduces the concept of non-traditional ACP imports. The GATT-bound element of that quota would be 2 million tonnes, and an additional unspecified amount would be settled annually or at shorter intervals, which would make up for the margin in the marketplace. Thus, the total size of the quota is not known. To take 1991 as an example, one would expect the dollar banana quota to be in the order of 2·3 million to 2·4 million tonnes.
Secondly, the proposal introduces a partnership concept in which 70 per cent. of the total quota would go to traders on the basis of their past trade in dollar fruit, but the remaining 30 per cent. would be allocated to companies on condition that they also imported ACP fruit. So a company could have dollar, ACP and additional dollar fruit within the 30 per cent. bracket. Three categories of bananas could thus be imported by the same company.
It is not yet clear how the licence system would work. Would it be for primary importers into the Community or for secondary importers—people who buy a surplus of bananas in the Community? The entrepot markets for bananas in Antwerp and Hamburg operate a bit like the stock market for oil and other commodities.
Because of the United Kingdom's links with its traditional suppliers, the volume of dollar fruit appearing on the market is relatively small, although it is certainly present in the marketplace, as we tend to import from supplies that have been delivered into the Community market.
The next element of the proposal concerns what happens to the ACP bananas. The proposal limits them to


traditional quantities at 1990 volumes and, beyond that, they must take pot luck in the dollar quota. There is pressure from the Commission to revise those ceilings, because Jamaica, for example, is recovering from a hurricane, so her ability to supply the marketplace has been affected. Moreover, significant investments in fruit made by countries such as Belize and Surinam have not yet borne fruit in production, so they do not want to find that that investment is rendered nugatory because it is not included in the Community proposal.
There is a proposal for income support and structural assistance for the Community and ACP producers, and for aid for Community producer organisations. A limited number of licences will be issued to newcomers—3·5 per cent. of the total quota—and quality standards are envisaged. That is the shape of the proposal on the table.
The present position is much as my hon. Friend the Member for Hendon, South described. Some countries have traditionally managed their markets in favour of particular suppliers. For instance, France has domestic producers in its overseas territories and some traditional producers in Cameroon and the Ivory Coast; Spain has a Canary Islands production; Portugal has a production in Madeira; and Greece has producers in Crete. Italy used to supply itself significantly from Somalia, but, because of what has happened in that unfortunate country. it now buys far more dollar fruit, so its position has slightly changed. The United Kingdom has her traditional suppliers.
The Community proposals are fiercely and passionately opposed by Germany, the Benelux countries and Denmark. Some countries that rarely mention the word "consumer" in the majority of their debates on agricultural matters have become sensitive to consumer needs when the issue of bananas is raised. While we may not necessarily agree with those countries about bananas, we hope that their approach sets an example that they will follow in their discussions of future problems relating to the common agricultural policy.
As my hon. Friend said, the Germans import bananas quota-free and tariff-free, and do not like the idea of quotas or partnership—both of which would mean much more restricted access than they presently enjoy.
The United Kingdom has long-standing commitments to provide preferential access for bananas from our traditional suppliers in the Commonwealth Caribbean-Jamaica and the Windward Islands. That goes back to 1932, when imperial preference was given on imports of bananas from Jamaica. My Department works closely with those producers in a programme to improve the quality of those bananas. A few months ago, I met the organisations from Jamaica, and one of the topics that we discussed was the extent to which Jamaica—which is making good progress—was meeting the quality norms. The Windward Islands are also making efforts, although they are a little behind Jamaica in their ability to upgrade the quality of some of their fruit.
That commitment is now embodied in protocol 5 of the fourth Community ACP convention—the Lomé convention—which states:
In respect of its banana exports to the Community markets, no ACP state shall be placed, as regards access to its traditional markets and its advantages on those markets, in a less favourable situation than in the past or at present.
That represents an obligation in international law on all EC member states.
The commitment recognises the importance of the banana industry to the Commonwealth Caribbean. Bananas account for more than 50 per cent. of export earnings in the Windwards, and the industry employs about 40 per cent. of the work force. Bananas are therefore vital to the economic, social and thus political stability of the islands.
Caribbean producers suffer several disadvantages compared to Latin American or dollar competitors. One must be careful not to lump all those producers together, as Honduras has a production that is very much in the hands of smallholders and is not the same scale of enterprise as is found in some of the other dollar producers. Caribbean producers suffer disadvantages in terms of terrain, soil type, climate, farm size, wage levels and economies of scale. They are unlikely to be able to compete on equal terms with the dollar producers, given their natural handicaps. Diversification options for Caribbean producers are limited. No product has yet been identified that would offer the same benefits as the banana industry.
The national market arrangements must he replaced by harmonised Communitywide arrangements in order to complete the single market. The mechanisms that have permitted the markets to be divided up simply will not exist once the single market comes into existence. We are condemned to find some agreement.
We have recognised the difficulty of the task, and must reconcile the objectives that I have listed. Those objectives include the obligation to the Community and ACP producers, under the treaty of Rome and the Lomé convention respectively—they are both international treaties; commitments in the GATT—nobody could not, at present, be conscious of their importance. Clearly, if the Community were to adopt the sort of formula I outlined in the proposal, that would require a waiver. We must observe the need for competition, efficiency and the aims of the single market. We have in mind the interests of consumers, as we do throughout debates on agricultural issues. We are also aware of the need to ensure that the Community uses its money sensibly. The United Kingdom has always been somewhat suspicious about the notion of substituting financial aid for trade opportunity. We do not feel that that is necessarily the right way to help developing countries. It is better to give them more access than to buy them off in a sort of banana decommissioning scheme Striking a balance between them will be difficult.
The Commission and the presidency, as we would expect, have to reflect on how to take the matter forward. We are gridlocked, as it were, on the negotiations. There is a powerful body of states that believe passionately in one formula and another powerful body of states that believe just as passionately in the opposite formula. It is an occasion when it is difficult, by doing a little tweaking or finessing, to bring one group into line with the other. We have to find a way forward. It will be for the Commission to propose that way, although the presidency will lend all the assistance it can, as we are duty bound to do.
The United Kingdom has to honour its commitment. We are not hooked on one mechanism or another. The mechanism is a subsidiary aspect. The primary aspect is to fulfil commitments that we have entered into voluntarily because of historical ties and the nature of the supplies we receive. The United Kingdom cannot and would not wish


to walk away from that. We have to find a way through difficult circumstances. We will examine any mechanism which delivers that.
We have said to the member states that object to the proposal, "What is your alternative? We assume that you are not saying that the commitment does not apply. Therefore, how do you square the circle? How do you meet that commitment and at the same time deal with the problems in the present proposal?" There was a working party under the Council yesterday which was examining the problem again and placing the challenge before member states.
Many people have come to my office and to the office of my right hon. Friend to discuss the matter. We welcome all representations.

Mr. Bernie Grant: Is not the problem the fact that, if the matter is not resolved in a way that works in the interests of the dollar producers, from 1 January Sainsbury and Tesco could send a truck to Frankfurt to pick up dollar bananas and bring them back?

Mr. Curry: The hon. Gentleman will be reassured to know that our reflections on the way forward cover any

lacuna that might emerge at the end of the year as we move into 1993. Therefore, we and the Commission wish to make appropriate proposals that would address that eventuality. I am sure that the hon. Gentleman will excuse me if I am not too precise, because the whole negotiation is difficult, but we are anxious to find a solution.
We welcome all representations on the matter. We are acutely conscious of the representations and the lobby from the dollar fruit producers as well as from those with a place in the British market already. We have not had a selective doorway. We will seek a way through.
My hon. Friend has an interest and I gladly undertake to keep him informed of progress and, of course, to report to the House. The next opportunity for that will be in the scrutiny debate which, I think, will be in a couple of weeks. I hope that, by that time, things will have moved forward a little. The problem commands great urgency because of the deadline referred to by the hon. Member for Tottenham (Mr. Grant). We cannot stop clocks indefinitely, and we have to get a solution. As I said, we are condemned to agree and, for once, we hope to be able to come out of the condemnation rejoicing.

Question put and agreed to.

Adjourned accordingly at twelve minutes to Eleven o'clock.